Is art good for investing? | aioinformation.com

 Is art good for investing?  |  tagesschau.de


Frequently asked questions

There are absolutely exceptional situations in which a work of art turns out to be a real gold mine. For example in the case of Leonardo da Vinci’s “Salvator Mundi”. In 2013, the painting sold for between $75 and $80 million, and shortly after it passed into the hands of a Russian billionaire for $127.5 million. But the maximum price has not yet been reached. In 2017, it became the world’s most expensive painting to date with a record price of $450.3 million.

But even apart from such dizzying sums, works of art seem to increase in value. This also makes them interesting for people looking for alternatives for their investments.

Art prizes increase value

Heike Negenborn has proven this in her art: when the artist started painting landscapes 35 years ago, there was still little demand for her artworks. Nowadays, landscape paintings are more fashionable and the value of images of them has increased rapidly. Also because she has won one art award after another in recent years.

This influences the price of the paintings: a painting that ten years ago could be sold for around 3,500 euros now costs 7,000 euros. Negeborn confesses that this surprised him: “Ten years ago I couldn’t imagine that my paintings would double their value.”

luck and Willingness to take risks

A trend that can be similarly observed throughout the art market: according to estimates, the annual increase in the value of art is around six percent. But this must be taken with caution, says Michael Grote, a financial expert at the Frankfurt School of Finance: “You have to be careful with this figure, because works of art only go on the market when it is believed that they will fetch a good price. Otherwise works of art are not put on the market.” Only artwork that actually sells counts toward the six percent value increase.

Finding a buyer for a piece of art can be the hardest part. And price developments are not always predictable, explains art historian Sophia Böhm. “It’s hard to calculate and so you have to be willing to take a bit of risk. There’s always a bit of luck involved.”

difficult to calculate

Financial expert Grote is also cautious about art as an investment. This is definitely an option for people who already have a large investment portfolio. “However, in general, it is not a primary means of saving for retirement.” The value of art is too volatile and too difficult to calculate.

Art as an investment is anything but a safe bet. But if you like art and buy works of art, perhaps you should check their value from time to time. It could possibly lead to a pleasant surprise.

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