How does the performance of collectible art compare to other investments over time?

According to Beautiful Asset Advisors, LLC, publishers of the Mei Moses World All Art Index, fine art as an investment has shown positive returns for the past fifty years, having approximately equal compound annual returns to the S&P 500 stock index, but lagging behind the performance of stocks in general for the past 25 years. In the past five and ten years, the Mei Moses index has outperformed equities.

How volatile are the returns generated by art as an investment?

The volatility of returns for art as an investment has been lower than international and U.S. equities over the past 25 years. An investment in art is highly illiquid, meaning it is very difficult to convert your purchase to cash now or in the future.

With what investments does art correlate?

Some investment advisers believe art is an interesting investment because it has nearly no correlation to the movements of prices of equities, and moves inversely to REITs and fixed income (bond) investments.

How do different sectors or genres of the art world perform as investments?

If you think of different genres of art as different sectors, each one may have more or less demand and returns. For example, according to the Mei Moses Index, post-war contemporary art has outperformed the impressionist and modern art genres.

What do experts at CNBC feel are benefits to art and antiques as investments?

Experts at CNBC believe that if you hold these tangible possessions for a very long time, they may appreciate in value. For example, you may have purchased an antique piece of furniture that you appreciate, love to look at or use, hold for thirty years, and sell it. You may make a profit. You may also not be able to give it away at any price. But you are able to enjoy using it while you have it. If you focus on a specific genre or period of art, antiques, or other collectibles, you may realize a return if you purchase it with the intent to hold it for a very long term. However, these investments are highly illiquid, meaning they cannot be easily or quickly converted to cash.

Why do prices of art and antiques vary so widely?

According to many experts, art and antique prices vary so widely because each is unique. And prices are not easily discerned, so it is difficult to assess if you are paying too much or too little for the investment.

What are some other hidden costs to art or antique collecting and ownership?

There are many other costs related to developing any kind of art collection, including costs of insurance, proper storage, appraisals, shipping, and consignment sales commissions.

 
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