You may have noticed how well the art market has performed in recent years. It has performed significantly better than stocks, shares, and commodities. The value of the modern art paintings on canvas market was half of what it is worth today ten years ago. Some paintings have skyrocketed in value, costing up to tens of thousands of dollars more than they were originally purchased for.
Many of you, but not all of you, are already buying art, which is one of the reasons the market has grown. Some of you are still hesitant to spend your hard-earned millions on the arts. You have every reason to be wary.
Making money from beautiful art is not as simple as it appears. But, just as in the financial world, there is a method to play and win in this market by understanding the importance of art as a resource.
The industry may have expanded beyond recognition in the last two decades, but the tricks of the trade are as old as time. Art, as it is said, follows the money. There are those who find a work of art to be beautiful, but their value is unfathomable. However, for some, it is a benefit. Let’s take a look at what it is about art that makes it such a valuable asset.
The Changing Art Market
Until the nineteenth century, the art market was a backwater where aristocracy, sports, antiques, and the Renaissance reigned supreme. The exception was 17th century Holland, where the urban middle class drove a bull market in art, but the European art market only really took off in the mid-18th century, when all the new wealthy entrepreneurs and industrialists caught the collecting bug for both old masters and what was being created fresh at the time. Art has become a popular hobby.
By the turn of the century, the Paris salon had grown to a half-million visitors. When the art market moved into the hands of the middle class into the new huge industrial fortunes in the mid-nineteenth century, people began to perceive canvas art as a means of profit.
The big difference between the king of prints in the country of nobility and the new merchant middle class is that the former buys art to keep, whilst the later has always looked for a profit.
Art as an asset, according to today’s collectors and dealers, is a relatively new concept. As a result, you would legitimately believe that this is a passing fad. The wise folks in the room over the channel, on the other hand, foresaw the future more than a century ago.
In 1904, a group of collectors led by a private collector resolved to invest money and buy works by contemporary artists over a ten-year period. They had determined from the start that they would sell the paintings at an auction after the ten-year period. They sold it as planned and made a great profit.
Valuing Art: The Rise Of Modern Art Investments
Art is more useful than it has ever been in today’s world; it is a financial instrument in a sophisticated global economy. Hedge funds invest in the arts, and finance businesses lend money using the artwork you own as collateral.
The price rise has been so dramatic that many veteran collectors have priced themselves out of the market. Art collectors consider creative wall painting art to be an asset class, similar to equities, bonds, gold, and cash.
Of course, it can be attractive, but beautiful art paintings are preferable to a flower vase or a handbag. There are different routes of investment in luxury items such as boats and cars now days where the money goes down, but there are also ways where the value might go up.
The increase in value seen in the modern art market over the last 15 years has inspired more people to enter the industry. These are the ones that wish to put money into something they like.
Let us not forget that many of the world’s wealthiest people buy art because they can afford it and because they like the way it looks! However, there is a legion of collectors who, naturally, go to a modern art gallery, buy a work of art, and expect it to do more than just satisfy their eyes and minds. Art is a valuable asset to them.