Art As An Asset Class - New Investment Research. A new report is out from the CFA Institute, it's in their May/June 2010 Publication.
As most MAO readers know.. you don't just buy art as an investment. It's for the love of it!!
But people all talk about art and money almost simultaneously. Just say hi to an art dealer, gallerina, or worse yet an Artist, and within 5 minutes you'll always hear some aspect of the evil Dollars, doe-rea-mee word MONEY come up. So while almost everyone in the art business hates to admit it, art and investing are inexplicably linked. MAO has written about art investing many times before. But, now a major financial publication has a 3 page story about it.
In fact, this May/June CFA Institute Magazine features Art Investing as the cover story.
The magazine has a feature story by Ed McCarthy who seems to know almost nothing about the art market is a freelance financial writer in Pascoag, Rhode Island.
The story is written from a strict investment professional point of view which is refreshing, but sadly the story lacks a lot of details.
Here's the story... Download Cfa_may_june2010
But the Key points highlighted in the article are
1. The term "Art Market" is misleading because the market encompasses numerous submarkets with distinct characteristics.
2. The unique features of the art market and the transaction costs create additional risk for the casual investors and investment opportunities for more knowledgeable participants.
3. Studies of art's investment properties show that returns vary with the holding period but have exhibited a low or negative correlation with financial markets.
So as you can see, this story is not exactly breaking new ground.. but it's interesting to see a well respected financial journal finally writing about Art as an acceptable investing asset class.
MAO wonder's if this was how subprime ABS and CDO investing started??