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Is Art a Wise Investment?

So…is art a wise investment or not?

Commercial galleries and auction houses would certainly have you believe so – and they have the skyrocketing sales to prove it. The much-ballyhooed ‘crash’ has so far failed to materialize.

yellow_dress.jpg
Kim Dorland, Yellow Dress, 2007. Image: kimdorland.com – A wise investment?

And yet as far as many wealth managers are concerned, “The conventional wisdom is that art collecting should not be viewed primarily as an investment. Robert C. Elliott, senior managing director at Bessemer Trust, says, “Bessemer counsels clients to treat art as a passion investment, rather than as an investment whose primary function is to produce an attractive return.”

Read the rest of this article HERE.

On Wednesday, August 13, VoCA will be co-presenting a seminar on art as an investment in collaboration with wealth manager Jeremy Tabarrok and art dealer Jamie Angell, in Toronto.

The seminar will aim to answer the following questions:

• What are the benefits of owning original art?
• Will my art appreciate in value?
• What factors will tell me if my work will appreciate.

• Should I insure my art?
• When should I sell my work?
• Can I make money from my collection?

• What are the tax implications of owning original artwork?
• Should I donate work to a museum?
• Are art investment funds a good idea?

• How do I form a cohesive collection?
• How do I make sure my work looks great in my home?
• How do I know what to buy?

We will post further information including time, cost and speaker biographies later this week.

7 Responses to “Is Art a Wise Investment?”

  1. Bill says:

    I would really like to come to this, but I can’t! I hope that you’ll post some of your and the other presenters’ insights/opinions from the evening’s discussion!

  2. Phil Taylor says:

    The article by David Adler, cited in this latest posting, offers very misleading analysis about the value of art.
    He reports that resale art has outperformed stocks over the last 10 years. This is really an apples/orange comparison.
    Only a tiny fraction of art produced ever re sells for more than it cost. Firstly, auction houses do not want art that they don’t think will sell for a good price, and many people who bring work to an action house are discouraged from selling. After all the auction house does not want everybodys crap. They would need an aircraft hangar to store it all. Plus they take a hefty percentage of the sale price which discourages sellers even more. But even if they take a piece to sell, there is a reserve price attached, so works will never sell for a low price. They are just taken off the market.

    In the case of stocks, it is wide open. If a stock price plummets there is no reserve price below which the stock will not be sold.
    So the art auction market artificially props up the value of art by only selling choice work with minimum prices attached.
    The fact is that the vast majority of art created over the last 100 years for example, would sell for less than the original sale price on the open market today.
    The stock market is a much better bet than buying art for investment purposes. Lots of people make money on stocks, but only a handful by comparison make money on art.

  3. Andrea says:

    That is true and these statistics are often used without an awareness of how skewed they are…that’s why it’s important to gain some knowledge or work with an advisor who will give you independent advice.

  4. Bill says:

    Or you could just always buy what you love and not think about it!

  5. Craig says:

    I’m with Bill on this. Buy what you love.

  6. Amrita says:

    It’s nice to not always be thinking about monetary value of things, art included — I am with Bill and Craig on just going with your heart and buying what makes you happy.

    I think this seminar may appeal to a particular segment of the market but 99.9% of the people I deal with don’t buy art with the investment potential in mind.

  7. sergiu says:

    hello my name is sergiu . I am artist and ……… is possible a collaboration? I want to sell my paintings
    Here you can see some pictures…. http://www.flickr.com/photos/40950494@N08/

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