Economy Got You Down? Start Collecting Art

If there is one thing upon which most everyone can agree, it’s that the global economy will remain in a state of flux for the foreseeable future. For many of us, this thought brings a wave of anxiety, mixed with confusion. What do we do today to preserve wealth? How do we invest limited assets to maximize our own resources?

You might be surprised to learn that more people of diverse financial backgrounds and aesthetic tastes are becoming art collectors. While buying fine art was once seen as the realm of the ultra-rich and uber-privileged, that is no longer the case. In fact, thanks to new financial tech tools and online resources, the fine arts market is increasingly lucrative and may be gaining in strength as other markets waver.

In fact, reports from leading art market experts such as Christie’s, the Mei Moses All Art Index and Sotheby’s all indicate the art world is thriving. In 2012, Cézanne’s painting of “The Card Players” sold for a record-breaking $250 million, and many other paintings have recently sold above market value. So why does art represent a good investment in this climate? And why is there an increase in those responding to hard economic times by beginning to collect art?

Let’s examine 4 key reasons to start an art collection right now.

1. If you are human, art collecting is in your DNA. Buying and selling art is the oldest form of commerce in recorded history. Almost as soon as our ancestors started using tools, they began using them to paint caves and design pottery; and soon after, they started trading their artwork. As early as the Second Century BC, works of art were traded internationally along the Silk Roads, as creative techniques were shared and new art forms created. Art commerce is the reason Chinese silk has been found on Egyptian mummies, while Sasanian-style gilt silver, made in the area we now call Afghanistan, was uncovered in Chinese tombs.

2. In times of global economic uncertainty, art represents stability and is often seen as a storehouse of wealth. In an era of change, people look to assets they can touch and hold onto, and those that will offer a generous return on their investment. Art combines the security of a “real asset” with the emotion involved in selecting an artwork that appeals to you. Unlike a piece of technology — which may offer a quick return but will have a short shelf life — fine art represents a product that holds meaning for more people and that will almost certainly stand the test of time. And unlike a traditional asset, high end art can be used to reduce risk and protect capital.

3. In our global village not everyone speaks the same language, but we all understand art. Art is a truly international form of commerce, easily moving across borders. It can be sold in any country with a functioning market, including parts of the second and third world that do not participate in other forms of commerce. Furthermore, in a time of globalization of cultures, there is an increasing interest both in preserving older forms of ethnic culture and in celebrating new hybrid cultures. This makes the current moment a particularly exciting one for new creative work– and for collecting works of art.

4. The global art market is now an accepted financial asset class. With a host of art funds, art lenders, art insurers and advisors growing each month in new and established firms, art investment is increasingly accessible for new buyers. Since it is now easier than ever to measure the worth of your collection, more individuals are open to diversifying their portfolio to include art. This, in turn, means more people are trying their luck as collectors. Today’s art collectors are on track to become tomorrow’s major players thanks to the rapid growth of this market.

Collecting art is attractive for a blend of sentimental, historical and material reasons — but they all contribute to the growing feeling that in today’s economic climate, acquiring and investing in art makes dollars — and sense! And as a collector, you not only benefit from the returns involved in selling a piece, you also experience the joys of being an art owner. You can stop worrying about your financial future and start enjoying the energy that art brings to your home and workspace day by day.

By Rayah Levy, Art Market Expert
Mutual Art, March 22, 2016:
http://www.mutualart.com/OpenArticle/Economy-Got-You-Down--Start-Collecting-A/0888C4C3C90297BE