The art of investing
Investing in painting again is more profitable than investing in stocks or raw materials. The growth of the index Mei Moses All Art, reflecting the change in prices for works of art, for the second consecutive year ahead of the growth of the stock index Standard & Poor's 500
Investments in art objects last year again brought investors more income than investments in stock markets, writes the Financial Times.
The main "art" index, tracking the prices of paintings sold at auctions in New York and London - Mei Moses All Art grew by 11% in 2011, while the total return on investment in the index was about 9 percentage points higher , than from investments in the stock index Standard & Poor's 500 (finished the year approximately at the same level with which it started).
Investments in Mei Moses were more profitable than investments in the S & P 500 six times in the last ten years, while the average return on investment in art was 7.8% versus only 2.7% for equity investments.
Although difficult times for connoisseurs of art had to survive more recently. In 2008, the art index lost 4.5%, and in 2009 it fell by 23.5%. And this after five years of growth on average by 20% per year. Worse than in 2009, things went only in 1991, then Mei Moses All Art for the year sank almost 40%.
But the shock of the participants of the auctions recovered quickly, as early as in 2010 the "artistic" index confidently went up and for the year it grew by 16.6% again ahead of Standard & Poor's 500, the latter finished the year with an increase of 15.06%. Last year, the results of Mei Moses All Art were a little more modest, but that was enough to exceed the results of the stock index.
Not only the stock markets, but also the commodity markets could not become a saving refuge for investors - the Standard & Poor's consolidated index GSCI Total Return Index fell in 2011 by 0.9%. And most of the raw materials have fallen in price, which reflects investor fears in terms of reducing demand for commodities against the background of the debt crisis in the euro area and the weakening of the growth rate of the Chinese economy. The growth of the US dollar against the currencies of six countries, the main US trading partners, which amounted to 1.8% this year, also reduced the demand for commodities, the value of which is denominated in US currency.
The profitability of investments in works of art is also indicated by the newly created Artnet AG index - investments in paintings by such modern artists as Andy Warhol or Damien Hirst, brought in more income than investments in shares from Standard & Poor's 500 Index, the last decade.
Since 2002, the work of the British D.Hirst has risen in price three times, the pictures of E. Warhol - four times, although the peak was reached in 2007, and during the crisis, both those and others became cheaper. For comparison: over the past 10 years, the S & P 500 has risen only 7%.
The Artnet index, which tracks the prices of the works of 50 contemporary artists, including R. Lichtenstein and K. Stylla, has more than tripled since 2002.
The rise in prices for art was still promoted by the high demand from investors and collectors from China, as well as the appearance of a number of popular artists in the market of works, notes FT.
The cost of traditional Chinese painting grew by an average of 20.6%, while many of the works were purchased by collectors from the PRC.
Prices for impressionistic and modernist paintings grew by 14%, and the paintings of the post-war and modern periods went up by 6.4%. The worst result was demonstrated by investments in the works of the masters of the Old School and artists of the 19th century. - The average return on investment in this category was only 4.8%.
But, all the same, mankind's craving for money is stronger, anyway, such a conclusion can be drawn from a comparison of the value of art objects sold from auctions in 2011 and 2010.
According to the agency Bloomberg, the total value of the 10 most valuable lots that went under the hammer in 2011 decreased by 41% compared to the same period in 2010 - to $ 413.6 million from $ 698.6 million.
At the same time, none of the lots could overcome the psychological threshold of $ 100 million. In 2010, this bar was exceeded at once by two pieces of art - the canvas by Pablo Picasso "Nude on the background of a bust and green leaves", sold in May 2010 at Christie's auction in New York for $ 106.4 million, which is the highest price for an art object in history, as well as the sculpture of Alberto Giacometti "The Walking Man", which went under the hammer for 65 million pounds ($ 103.4 million).