Is art a good investment? NPR investigates

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.

Vladimir Kryloff, 'Flower Study #14'. Image courtesy NPR.  NPR reporter Uri Berliner bought this painting by Lithuanian artist Vladimir Kryloff as an investment.

Vladimir Kryloff, ‘Flower Study #14’. Image courtesy NPR.  NPR reporter Uri Berliner bought this painting by Lithuanian artist Vladimir Kryloff as an investment.

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.”

Mike Moses, Co-creator of the Mei Moses Fine Art Index, which tracks repeat auction sales, states in the broadcast:

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.

Susan Kendzulak

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Related Topics: business of art, market watch, art and recession

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