Can collecting contemporary art be good for business as well as pleasure?
An audio talk aired on 19 June 2013 on NPR discussed why business reporter Uri Berliner decided to invest in art, and whether buying art makes more financial sense than depositing money into a savings account.
Uri Berliner, NPR’s Senior Editor covering business and economics, heard a rumour that savings accounts were losing value due to inflation, so he decided to conduct an investing experiment to discover more lucrative ways to use money wisely.
Berliner set aside USD 5,000 of his personal money to invest in various ways. Intrigued by the work of Vladimir Kryloff, a Lithuanian artist, Berliner bought Flower Study #14 online for USD 139, an emotional more than financial investment, in the broadcaster’s own estimates.
In the broadcast “The Art of Investing“, Berliner discusses his experience of buying the piece of art on the Internet with several financial and art experts, likening the experience to that of the online purchase of mutual funds.
- Art as alternative asset
Art adviser Cappy Price says in the audio broadcast that the Internet allows people to research art in the same way that they research stock. Price also states that art is an incredibly strong investment because “it outperforms in times of economic turmoil and trouble.”
- Art outperforms Standard & Poor’s 500 stock market index
If you use the last 30 years, the S&P substantially outperforms art. If you look at the most recent eight [to] 10 years, art has outperformed the S&P.
- How to buy art
Price advises Berliner on how to buy art. She tell him to look at the comparables, meaning compare the prices of similar paintings of the same size. Berliner’s investment in art was USD 450 for the painting, plus USD 139 for shipping from Vilnius to Washington, D.C.
Price praised his selection of an Impressionist-style painting as a popular selection, but warned Berliner that reselling an unknown artist’s work could prove difficult.
- The verdict
Berliner’s verdict about purchasing art as an investment ends in something of a revelation for the business editor and budding collector. He admits he was first drawn to the colours and patterns of the painting, buying it impulsively rather than researching the comparables beforehand. Realising his purchase was an emotional investment as much as a financial one, Berliner ends the report saying he will gladly keep the Vladimir Kryloff painting, implying that emotional investments are just as valuable as financial ones.
- What is ahead for contemporary Asian art, 2012 and beyond? Part I – January 2012 – Art Radar outlines trends in the art world and how those may influence auction markets
- Chinese art market confidence remains at “all-time high”– ArtTactic November 2011 report – December 2011 – confidence in the Chinese contemporary art market is the highest in the world, though reservations remain
- Christie’s ‘Faces of New China’ Private Collection Sale underperforms amidst art market slowdown – December 2011 – market fears lead to severe underperformance for an important auction of contemporary Chinese art
- How confident is the art market? Depends on the price range – October 2011 – ArtTactic clarifies which works do well and which flounder in a recession market
- Sotheby’s Hong Kong Autumn Sale 2011: Contemporary Asian Art – October 2011 – Sotheby’s held a major October exhibition in which several lots failed to sell
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