Diversification:
Investing in art is a great alternative to reduce risk exposure to your investment portfolio. Art is a one of kind investment because its value traditionally yields a limited depreciation. The Art market has been shown to outperform the S&P 500 and more conservative long-term investments. The prerequisite to investing in art is to acquire top-quality art for long-term ownership of 10 years or longer.
Economic Downturn:
In a recession, traditionally investors begin to look towards alternative investments such as art. This is due to a decrease in equities and real estate property investments which lack strong returns.
Research proves quality art has the ability to survive an economic downturn because the value of art holdings never decrease to zero, compared to more traditional investments.
Capital appreciation:
This benefit attracts investors who want to achieve long-term growth that will survive inflation and possibly outperform the stock market. An ever-increasing demand for art due to globalization, rising incomes and extensive information on the art market, are all factors fuelling this upward trend.
Corporate Taxation benefit:
Those seeking capital gains rather than income, art in a corporate environment can be written-off over time as an expense.
Philanthropy:
When investing in art, you are contributing to the development of culture and stimulating the growth of the Creative Economy, while providing support for artists.
It is important to note that most people who have made money from art did not make it by purchasing art as an investment. The key to a great investment is the combination of knowledge, diversification and a passion for art.
Published by Clarke Art Consulting © 2009
