The most usual form of investment is investing in various financial products related to stock markets etc. However, sometimes these products don’t have a high return on investment rate and a lot of them are not suitable for long term planning. Investing in art does exactly that as purchasing a painting for example, may mean that your family can make a profit several years later or even centuries. By reading this article you will get an idea of how art can also be an investment.
Art is a major investment class, extremely uncorrelated to other asset classes. These uncorrelated categories in an investment portfolio will compensate for potential losses and generate good returns, as shown by the art market’s success in 2018. Many traditional markets suffered over the same time. As it is a viable choice for diversification, art investment is becoming more important than ever before. To order to maintain a portfolio’s financial strength during times of economic instability, it is important to have asset classes at hand that move independently of each other.
Art is a special asset class which needs more commitment than other investment types. By default, artworks are original unlike stocks. So, before you buy, it’s worth doing your due diligence. Unlike other funds, though you own it, you will not earn any monetary interest or dividends.
Unlike other investments, when you own it, you won’t get any monetary interest or dividends. If you buy art as an investment, considering the resale value is essential and answer the question “is there any at all?” We assume that after the sale, only about 10% of all art sold can maintain its price. However, if you’re told about the artist and his work and you’re happy to spend $10,000 or $100,000 on a painting that doesn’t have a re-sale value, that’s okay too. Yet, without thought, not too many art buyers can afford to spend bigger amounts. In addition, with art, you can find the resale value–unlike most other products that never hold their value, and even less increase it. It is assumed that if the quality of an artwork is preserved, it is already a good investment. In the course of several years, capital gains would be reached, not in the short term. And it can be very difficult to measure the performance of art, as there are so many different factors to consider: the artist, the time, the medium, the individual artwork, price growth over the years.
There are many opportunities for investors in the vast world of art. Of course, investing in art isn’t the easiest thing in the world if you don’t have any idea about it. To improve you should read and study art so you will be able to recognise an opportunity when it comes up. Art is ideal for long term planning and this should not be forgotten by any investor.