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Investment in Art

Posted: Sat Jun 11, 2022 12:47 am
by concerned
Hi
Has anyone invested in classic Art? I was reading some place that on average it returns circa 7% per year. Maybe a good way to diversify?
Came across the below site, not sure how reliable this company is. This site says 13% appreciation per year to date
https://www.benzinga.com/money/art-hub/ ... ntent=site

Re: Investment in Art

Posted: Sat Jun 11, 2022 4:08 am
by Haystack
concerned wrote: Sat Jun 11, 2022 12:47 am Hi
Has anyone invested in classic Art? I was reading some place that on average it returns circa 7% per year. Maybe a good way to diversify?
Came across the below site, not sure how reliable this company is. This site says 13% appreciation per year to date
https://www.benzinga.com/money/art-hub/ ... ntent=site
Valuations for art are not standardized. I would not trust sell side research, period.

Re: Investment in Art

Posted: Sat Jun 11, 2022 5:08 am
by Tkydon
Anything is only worth what you can get someone to pay for it. If you can't find a buyer, it is not worth what you paid for it. Only your appreciation...

Watch 何でも鑑定. You wouldn't be able to sell to a dealer at the stated 'value'.

When you buy, you are paying the profit to the seller; Sales Commission or Galary Profit (tied-up capital, rent, wages, utilities, etc.), which you may not be able to recover in the near term.

If you bought something at auction, by definition, there was no-one who was willing to pay more than you paid on the day, or you wouldn't have been able to buy it...

If it's truly valuable, you would also incur storage and other costs...

https://tybennett.com/do-you-know-your-value/

The moral of that story in this case is that you need to find the right buyer, but that may be difficult for an individual.

If you go to sell it to a dealer, he/she will only pay you a fraction of what he/she thinks he/she can sell it for, as he/she needs to make a profit (tied-up capital, rent, wages, utilities, etc.), especially if you need to sell...

You could sell it at auction, but you will only get what the last bidder was willing to pay on the day, and then you need to pay the auction house fees...

If you buy and hold, you may be able to sell for more than you paid for it, after all costs, some time in the future, or you may not...

Art is a closed group of 'Insiders' and then 'The Rest'. If you're not an 'Insider', then you're 'The Rest'... 'Insiders' make their money off 'The Rest'...

Just as with other markets, yields are an average of some big winners, some small winners, some small losers, and some big losers...

If you hold Art for a long time, you might expect it's value to keep pace with inflation, unless very rare and very sought after...

Re: Investment in Art

Posted: Sat Jun 11, 2022 8:28 am
by concerned
Thanks! all for the reply on this, I guess the old advice of only investing in what you understand holds here, and I definitely do not understand this..

Re: Investment in Art

Posted: Sat Jun 11, 2022 9:23 am
by Haystack
concerned wrote: Sat Jun 11, 2022 8:28 am Thanks! all for the reply on this, I guess the old advice of only investing in what you understand holds here, and I definitely do not understand this..
The missing peice of the puzzle is this:

Art is a perfect way to launder money. That is one reason why evaluations are all over the place.


https://www.researchgate.net/post/How_d ... the%20bank.

Re: Investment in Art

Posted: Sat Jun 11, 2022 9:47 am
by concerned
Gosh so easy to launder money for sure, thanks for the link

Re: Investment in Art

Posted: Sat Jun 11, 2022 9:55 am
by Patp02
I remember seeing a signed Andy Warhol Campbell's soup can silkscreen print for sale in Seibu Ikebukuro before the bubble burst in 1990.