Alternative investments - art market

Always in times of crisis, there is an increased interest in alternative investments and markets, uncorrelated with stock markets.

One such alternative is investing in art. Here are some statistics. Over the past 50 years, prices of luxury goods and art treasures have risen by an average of 12.6% per year, while the U.S. stock market has risen by 11.7% annually. Investments in the art market have been encouraged to develop because of the growing number of high-income earners and the uncertainty of familiar markets.

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The global art market is experiencing a sharp increase in its turnover. If in 2002 the market volume was equal to about 26 billion, by 2008 it reached 50 billion euros. This growth is primarily due to the increase in sales of paintings. In 2007, records were set for art prices. Now all sales are shared by two sectors: auctions and art dealers, in roughly the same proportion. Among auction houses can be singled out the house of Sotheby's and Christie's, which occupy about 30% of all auction sales. In total, there are about five thousand different auction houses in the art market. There are about 70,000 art dealers, various brokers and artists' agents in the dealer sector. Approximately four thousand large dealers service 75% of turnover in this sector. There has been a recent trend toward convergence of these sectors.

American art market Thanks to the flexible state customs policy, it is one of the largest markets in the world, accounting for 50% of the world's turnover of art valuables. On average, about 60 out of 100 major sales are concluded in New York.

Slightly inferior to the American European art market. Value turnover is roughly comparable to the US market. Among the European market, the UK market is the largest (60% of the European market and 30% of the turnover of values). New York and London together hold 70% of the world art market. France and Germany also have large art markets (6% of the world volume).

In Russia, the art market is not developed, it is just being formed. This is mostly due to the wrong state policy in the field of art and the high risk of fakes of Russian "antiquities".

Art market indicators

Investing in art objects - Long-term investments, the more years an art object is, the more expensive it can be sold. The real price of the painting does not know even the master, only after 30 years you can roughly estimate the price of the product. For example, now popular paintings of Soviet artists of 1970-1980 years.

In the West, the art market was formed in the 1960s. In addition to institutions serving the art market, indicators of art profitability (the world-famous Mei-Mosses All Art Index, Gabrius Art Index, Artprice, ArtNet, ArtSales Index, etc.) appeared. Art index formationis similar to the compilation of real estate indices and is based on the analysis of average prices for a certain period.

ERR Index from Skate Press is based on the effective annual rate of return for determining the profitability of art valuables.

ARTMIX Index (ARTInvestment Market IndeX) - Russian index characterizes the relative value of the price of art conditionally averaged for a certain period of time. The calculations are based on data on sales of works of art at world auctions.

Investors wishing to operate in the art markets may not buy an artwork, but may choose one of the investment strategies. The first consists of investing in art stocks, the other consists of investing in art funds, which are becoming more and more accessible to private investors.

Investing in art - It is a relatively new segment of the market, it is poorly understood, and offers great opportunities for investors.

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