fine art investment
219379514
The Fine Art of Investing Determining Risk and Return of an Investment in Art
If one should buy something only because one loves it for its beauty or some other aspect of aesthetic or personal appeal, one can never really lose. Individuals who collect art and who share the growing interest in art as an investment question whether art is a good investment particularly when art is illiquid and the ability to convert an art investment into cash expeditiously is limited. Anything that can be said about art as an investment obviously applies only to genuine art and not fakes or forgeries. Investors need to be able to find out what is authentic and what is not. Art prices may be quite unpredictable, and investment horizons may run for decades and art often ends up as part of an estate. Past performance in art investing is no indicator of future results. At the same time statistics suggest that discerning investors might at least want to give some thought to adding art to their portfolios. The next issue is whether art serves any function in a portfolio. Sales at the major auction houses are setting record prices for art against the backdrop of major recession. Studies indicate that art values tend to hold up well during periods of economic difficulty and that art indices outperform major stock indices during times of war. Art could therefore be a balancing or stabilizing asset. This study considers whether investing in a fine art at the correct price could diversify a portfolio risk and stabilize the volatility of one's portfolio and position one's art collection for upside appreciation. Since investment in art is modeled with due regard to the peculiarities of artistic work and value created activities, it follows that the construction of earnings functions and models of career choice in this area will also need to account for the risk and return function. A successful entrepreneur sees business where others do not. The blessing of the capitalist system is that it rewards those that come with good new ideas and bring them to business.
Ralph Palliam
214152534
Investment in Fine Art Market Versus Investment in Financial Instruments
The art market has been seen always as an area of excellence, where only the elected people can understand the mysteries of the specific of the arts. Although there might be both investments in assets, the investment in art and the investment in financial instruments are different. This paper explores the differences between these two types of investments. Keywords: art investment, art value, art price
Ana Corina Dimitriu Gheorghe Hurduzeu
210956209
Investment in Fine Art Market Versus Investment in Financial Instruments
The art market has been seen always as an area of excellence, where only the elected people can understand the mysteries of the specific of the arts. Although there might be both investments in assets, the investment in art and the investment in financial instruments are different. This paper explores the differences between these two types of investments.
A Victor Ginsburgh
55007243
FROM TICKER TAPE TO OIL PAINT: A COMPARATIVE ANALYSIS OF RETURNS TO FINE ART AND STOCK INVESTMENT
Anna Ghadar
158204444
An Empirical Comparison of Fine Art Prints Market and Conventional Financial Market Performance in the UK, USA, China, France and Germany
Recently the art market has experienced almost unprecedented rises in valuation. Works of fine art selling at auction houses such as Christie's and Sotheby's have realised vast returns for their sellers. The fine art market has undergone significant growth and has attained a level of sophistication that can no longer be explained by irrational collectors' exuberance. With uncertain stock market returns and the economic slowdown, especially in 2016, investors are more willing to seek alternative asset classes to fulfil their need to uphold their returns without taking on additional risk. Art as an alternative investment class has been debated for decades, however, the heterogeneity and the systematic risk of art remains a problematic issue that many researchers attempt to explore (Renneboog Van Houtte 2002; Kraussl Schellart 2007; Witkowska 2014) Thus, this research aims to investigate the performance of the fine art prints market in comparison with the bond and the stock markets. It will focus on both individuals and institutions to make more sustainable long term investment decisions that will bring benefit for both business and culture (Pownall 2005) This will allow a better understanding of what specific financial decisions that most of the investors need to consider when investing in fine prints. This research will present a comprehensive analysis of the determinants of prices and the risk and return of the fine art prints. The hedonic regression with the time dummy approach has been applied to construct the fine art prints price along with other quality variables to measure the price movement in the UK, USA, China, France and Germany from 1996 to 2016.
Xin Wen
167538421
The Fine Art of Finance. The Visual Arts Sector as an Investment Opportunity
The growth of the art market and its infrastructure in the last ten years is fuelingan increasing interest in art as an asset class. This paper tries to analyze how investorsare treating art as an asset class and how art compares to traditional assets suchas equities and bonds. More specifically, the research focuses on the analysis of theart market from a financial point of view, in order to investigate the characteristicsand motivations of the speculative demand and the role played by art advisors. Aspecial attention will be paid to art funds with the aim of presenting the specificitiesof these alternative investment vehicles.
Alessia Zorloni
151259345
Fine art photography as a form of investment
This thesis contains a research on the performance of fine art photography in the global art market in 1996 2008. Using the data base with 83,000 auction sales records, I applied average (naive) price index methodology to determine rates of return on investing in photographs. The caluclations were made using three approaches according time classification monthly, semi annual and annual analysis. The data was sorted in two sets total sales and sales excluding top 1.5 per cent of outliers. Based on the price indices obtained, I concluded that fine art photography on total sales results with an average of 7 per cent for semi annual period and 10.78 per cent for annual period (in real terms, U.S. dollars) To test the 'Masterpiece effect' I computed rate of return on top 1.5 per cent of highly priced artoworks, compared it to the rate on rest of photographs and concluded the presence of anomaly on this market. The rate of return as well as the rate of market volatility were high (16.07 per cent and 24.08 per cent relatively) which implied that expensive artworks are considered to be financially beneficial, but risky assets for funds allocation. During the 2002 2007, I detected boom period when art prices were growing steadily and sufficiently, which explained the increased attention to fine art photography as a form of investment. To determine whether photography is a relevant sphere to invest in or not, I compared the results to the financial market, represented by the Dow Jones Industrial Average Index. After classifying the data into semi annual and annual sets and deducing rates of return, I experienced that art market substantially outperforms classic assets. However, rates of volatility on financial market were detected to be the lowest comparing to art market indices. The closest rate of risks was present on annuallized fine art photography set where returns exceeded financial results by seven times. Essential to mention that art market differs from financial markets first of all by high transaction costs that tend to spread over time, but here (in short run period 1996 2008) may influence rates of return sufficiently. Numerous characteristic features of the art market should be considered while constructing the investment porfolio, however the results of this research demonstrated high and promising results on fine art photography as a form of investment.
O S Semenets
194055471
Is Fine art a viable alternative investment
Predmetem prace je trh s umenim jako investicni prilezitost. Nezabyva se umeleckymi charakteristikami trhu, ale soustreduje se jen na podnikatelske a ekonomicke aspekty trhu s umeleckymi dily jako s obchodovatelnym zbozim. Nasim cilem bude urcit zda je nebo neni trh s umeleckymi dily vhodnym investicnim prostredkem, nabizejicim zajimavou moznost investicni diverzifikace. Prace zkouma blize posledni financni krizi ve snaze porozume mechanismu, ktery ovlivnuje financni trhy a umeni. Toto je zakladem vytvoreni investicniho portfolia zahrnujiciho umeni. Zaverem prace jsou nektera doporuceni jak docilit efektivnejsich nez ocekavanych vynosu.
V J Thomas
174780447
Disempowering institutional behaviour by exploring the risks associated with investing into the Fine Art Market
Research illustrates that the procurement and selling of fine art are extremely psychological. The wealthy classes infrequently buy fine aesthetic objects for merely financial reasons. There is a sense of emotional gratification from acquiring attractive fine art but it can be a risky enterprise when purchased not only as a leisure activity, but also as an investment. Purchasers of fine art derive immense pleasure from exhibiting their art in their home and also share art with their peers. Owning fine art also grants one greater social status but given that the valuation of fine art is highly subjective, if one's motivations are purely financial, and not necessarily leisure based, this makes investing in fine art decidedly risky. This article examines the role of institutions in the global art market. Due to the asymmetrical distribution of information between art investors and the art institutions, there is uncertainty over the value of 'Fine Art' between those that wish to indirectly manipulate the price of art for the benefit of the institution, and those that wish to invest into the 'Fine Art' market. The value of 'Fine Art' is determined by the 'Value of Information' which has a direct positive relationship between quantity of information that the institution plans to hold, and the amount of uncertainty in the market.
Peter Baur
157364092
The Fine Art of Financing: The Jpmorgan Private Bank and Lending Against Art
Due to an increase in the number of wealthy individuals the demand for artwork had increased, and artwork was considered an investment asset. Artwork was listed as a "treasure asset" or an "investment of passion" by investment industry publications, recognizing its importance in the portfolios of the wealthy. The financialization of the art market went hand in hand with a growing understanding of the investment properties of art. Developing this knowledge took time because measuring the returns to a heterogeneous and illiquid asset like art or real estate was challenging. Excerpt UVA F 1760 Rev. Mar. 5, 2018 The Fine Art of Financing: The JPMorgan Private Bank and Lending Against Art With total assets exceeding USD2.5 trillion, JPMorgan Chase Co. was the largest bank in the United States. The merger of JPMorgan Co. with Chase Manhattan Corporation in 2000 had created a financial behemoth that offered clients access to commercial banking, investment banking, investment management, wealth management, brokerage, and private banking services. Walking into any of the JPMorgan buildings in the United States and around the world, visitors were likely to encounter works of art from the firm's corporate art collection. With approximately 30,000 pieces of art, including sculptures, paintings, and photographs from such artists as Andy Warhol, Jean Michel Basquiat, Roy Lichtenstein, and Milton Avery spread over 450 different locations, it was one of the largest corporate collections in existence. The driving force behind JPMorgan's corporate art program was David Rockefeller, the grandson of John D. Rockefeller and former president, CEO, and chairman of Chase Manhattan Bank. Rockefeller initiated the collection in 1959, out of a desire to both beautify Chase buildings and enable employees, clients, and others to appreciate great works of art.
Richard B Evans Roman Kraussl Pedro Matos Christophe Spaenjers