Is art a good investment?

 

Linda Yueh talks to artist Chris Levine

When worried about cheap cash eroding the value of fiat money and potential inflation, art is a real asset that investors turn to.

Like bricks and mortar, it's the tangibility and physical supply of fine art which gives it appeal as an investment class.

But, is it a good investment? According to one index, art has only returned 2% last year against a backdrop of global stocks rising by 10%. That was, of course, largely before the looming end of the era of cheap money.

Ben Bernanke signalled it last May, and the US Federal Reserve has begun to taper or cut back its cash injections from this month.

Yet, the most expensive piece of art ever sold was a Francis Bacon painting for more than $142m (£86.8m) last year. And, it's not classical pieces but rather those contemporary and modern art made since 1875 which are the largest part of the global art trade, accounting for nearly 70%.

It's also a sizeable global market amounting to around $60bn annually. Buyers from China vie with the US and the European Union as the biggest buyers, each accounting for about one-third of the market.

I met light artist Chris Levine, whose portrait of the Queen was on the cover of TIME magazine, to find out how the global market in art is doing.

 
Linda Yueh Article written by Linda Yueh Linda Yueh Chief business correspondent

India's hard budget choices

India's finance minister is planning to reduce subsidies, raise taxes and encourage foreign investment in the hope of revitalising the economy.

Read full article

More on This Story

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    0

    Comment number 11.

    Your fantastic piece of highly priced art becomes mundane if everybody has invested in similar art.

    The value of the art is the art itself!

  • rate this
    0

    Comment number 10.

    The past is full of sad stories of people who have tried this and seen a slump in values, because alll these types of alternative assets have no intrinsic value and are totally reliant on continuing demand.
    It may be that you hear of spectacular deals, but the truth is rather more negative for many. If you like a painting/classic car then buy it but don't kid yourselfe its an investment

  • rate this
    +1

    Comment number 9.

    Portfolio Diversity.

    Not difficult when you are a multi-millionaire investment banker or such.

    Bit of art, vintage car/wine couple of properties one by the sea, etc etc etc. If one goes belly up - no big deal.

  • rate this
    +1

    Comment number 8.

    If anyone is interested I have an old bed and a pile of bricks behind the barn, I call it a "discarded and unused" it could be yours for £250k. Or free if you want to take it away!

  • rate this
    0

    Comment number 7.

    Not for the average person IMO.
    If you have the cash buy what you like and enjoy it.
    If it turns out to be a good investment - which is unlikely - well, that's a bonus for your kids.
    Pictures, bronzes and sculpture don't produce an income.
    We have filled up our walls with affordable (ie cheap) water colour landscapes and seascapes.
    Alan

 

Comments 5 of 11

 

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.