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Art as an investment?

Scritto da Vittoria Azzarita il 8 Maggio 2014 in Libri

In the contemporary economic context, the art market has acquired a relevant position thanks to its ability to put on the table a huge amount of money. The profits obtained by the two most popular auction houses in the world – i.e. Christie’s and Sotheby’s – have attracted the attention of a multiplicity of subjects interested in different aspects related to the commercialization of works of art.

 

Artists, collectors, galleries, auction houses, art advisers, critics, investors, buyers, and sellers are parts of the same business, contributing to create both an elitist realm and a vicious circle where some of them play more than one character in a single show (with a evident conflict of interest).

 

One of the most controversial features of art as an asset is the hybrid nature of its value, which is composed of a financial side and an aesthetic one. Implying a high rate of subjectivity, the latter represents a sort of insurmountable obstacle that feeds a critical debate in terms of both economy and philosophy in order to identify a common method of establishing the monetary worth of artworks.

 

Nevertheless, numerous academics and experts are studying such a financial niche in order to better understand how it works, a clear explanation of its rules and variables seems to be so far away. With the aim of providing collectors and investors with a set of essential information, the book written by Melanie Gerlis – the Art Market editor of The Art Newspaper – offers an overview of the art market by comparing art to some traditional assets like stocks, gold, wine and property to name a few.

 

As stated by the author, one of the main issues that affect the art market is the asymmetry of information that makes extremely difficult to set up a group of indicators capable to price a work of art. This aspect becomes more significant when we talk about contemporary art and private sales for which it is quite impossible to retrieve public and open data. “While some of this is being challenged by the growth of mass information and general awareness”, Melanie Gerlis affirms, “there is a large body of powerful players in whose interest it is to preserve the opacity – this perhaps accounts for the slow uptake of more transparent opportunities for trading art”.

 

In this respect, according to a New York Magazine’s article by Andrew Rice – upon the unclear relationship that links Sotheby’s to the hedge-fund activist Daniel Loeb – the art market is said to be “an opaque market, where secret side deals, price manipulation, kickbacks, and collusion are an everyday facet of business”. These peculiarities seem to strengthen the fact that “since the [art] market is largely unregulated, players can trade on it without any fear of legal consequences”.

 

Written in a non-specialist language, Melanie Gerlis’s book represent a useful tool in order to start to know and understand the main features of the art market. Pointing out similarities and differences that exist between art and other kinds of assets, the author try to figure out an answer to the question whether art is a good investment or not.

 

Art as an investment?
A survey of comparative assets
Melanie Gerlis
Lund Humphries, 2014
£ 30,00

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