at a time when a reassessment of the “essentials” is foremost on the minds of many,
may seem anything but essential.
That is, except for those of you who are avid art collectors.
For you, if there is a will, there is a way.
The Mei Moses Fine Art Index is the number one art index most often quoted by the media and elsewhere in the analysis of the financial returns of the art market. The Index focuses on mature artists whose works command significant prices at auction and represents the annual percentage of return realized on a fine art investment for a particular year.
Art market prices have certainly not enjoyed immunity from the recent financial upheaval. The Mei Moses website on the 2008 art index report states, “The 2008 decrease in the return of the all art index of almost 4.5 percent is the first time our all art index has declined after five years of positive annual growth averaging almost 20 percent.”
Furthermore, their recent findings for the first quarter of this year indicate that their “all art index” declined by 35%. According to the Financial Times Limited, the “decline accelerated as people who lost money in the financial crisis put up works for sale, often at a loss.” Even corporations and museums are downsizing their collections. The data from the Mei Moses Index indicates contemporary and postwar art prices suffered the most, though the Old Masters were only marginally affected.
Clearly it’s a buyers market and a great time to buy original artwork if you are the average collector or someone interested in starting a collection. One side benefit of a slower market is that if you are a novice collector, the gallery dealers and experts will have more time to talk to you.
Is art a good investment these days?
Vicky Nash Shaw, ISA AM, an accredited personal property appraiser (www.TheAuthenticAppraisal.com) reports, “Like the stock market, unless you have a crystal ball, it is difficult to tell. There are periods in recent history where art prices certainly outperformed the stock market, as measured by comparing the Mei Moses Index to the S&P; Index. Many art experts believe that art will outperform the stock index over the long run…”
Still it’s always been risky to trade in fine art for profit. You can’t always get instant liquidity by dumping a painting on the market as you would with a stock, without taking a loss. The wiser perspective might be to buy art for love first, but also regard it as an investment for profit over time.
Rick Friedman, developer of ArtHamptons and the Hamptons Home and Garden Show, (Bridgehampton and Southampton, NY) is himself, an avid collector of mid 20th century art, has this to say about investing in art. “As it stands, dealers are eager to move their wares and are willing to negotiate. The current prices haven’t been this low in four or five years. However this window of opportunity may only be temporary. Because a lot of high quality art was sold on the market at a loss earlier this year, there may be some “bounce back” at some point in the near future.”
Given these circumstances, whether you are seasoned collector, a novice or gallery tourist, there is no time like the present to investigate the art market for treasures you will love that will love you back with appreciated value over time.
Artwork – Purple Haze by Gavin Zeigler. For more great art and sculpture visit www.gavinzeigler.com