Art Provides the Best Investment Return

Posted by Original Fine Art Gallery at 10/14/2008 4:43 PM
Categories: Art Investment,Art in the News,Original Fine Art For Sale


Art Provides the Best Investment Return


"Nonfinancial assets form the greater part of world wealth and have been more stable in value during periods of financial and social turbulence" Roger Ibbotson and Gary Brinson

Interest in reliable alternative investments is always heightened when the foundations of the bellwethers become rocky. And if history is a reliable guide, art values will continue to be favorably impacted as credit and equity markets lose their luster. I would argue that now is the time to go for the non-traditional investments and to look to instruments that over time will, and have, served as true stores of value, such as ART.


When making asset allocation decisions, especially in such economically challenging times as these, just consider the fact that Thru early October, investing in the S&P500 earned a 0% return for the past ten years - that certainly was not the case for investors in art, in fact those fortunate or smart enough to have bought and held art over ten years ago would have a realized a phenomenal relative gain.

Going forward, given that the consumer sector makes up 2/3 of the economy, and in light of growing unemployment, non-existent credit and sharp declines in the value of the housing stock, and people's retirement and investment accounts, it's safe to say that the consumer will continue to rein in spending, making it increasingly difficult for companies to realize earnings gains. In such a scenario, the stock market becomes an even dicier place to expect to reap positive returns.

And finally, remember that art has a low correlation with the stock and bond markets which makes it an excellent way to diversify a portfolio and reduce overall risk. Far from being a luxury, it can be argued that art is an essential component of any portfolio.
 

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