In a nutshell, art holds some pretty interesting properties as an investment:
- It's an effective hedge against inflation
- It has low correlation to the S&P 500 and to gold and a negative correlation to the 10-year Treasury note
- Investment interest is increasing from the financial community, family offices, emerging markets, and wealthy individuals
- Art offers diversification, geographically, from diverse returns among artists, and with its hedging and correlation properties
A recent study released by Tangent Capital identified four periods since the early 20th Century when art outperformed the S&P 500 during a recession.
- From 1913 – 1920: Art: 12.3% S&P: 9.9%
- From 1937 – 1946: Art: 9.7% S&P: 0%
- From 1949 – 1954: Art: 15.8% S&P: 10.8%
- From 1966 – 1975: Art; 15.2% S&P: 3.4%
By late 2011, notice was made that returns on works by Damien Hirst and Andy Warhol had outperformed the S&P 500 since 2002.
Hirst’s work had tripled in price since 2002 and values on Warhol’s work had quadrupled. The S&P returned around 7% over the same period.
And like any other asset class, there are risks to be managed.
- Art is an illiquid investment and investors should have a long time horizon for expected returns
- Estate taxes may be in arrears because an owner took a piece off the walls of his home before he died and simply handed it to an heir
- Not knowing the provenance (path of ownership and price history) of a piece can impede the ability to sell it
- Failure to research the right market in which to sell a piece of work can significantly depress prices
- Emotional ties to art work can cause disruption in families if some want to sell and others do not
If your clients don’t have the millions it takes to purchase a piece at auction or at a private sale, there are other ways they can invest.
A $20 million fund started in 2007 offered private placement minimum investments of $100,000. It reportedly returned over 28% between 2007 and 2010, investing in works of 20th and 21st Century artists.
If art-based ETFs or closed end funds are created as predicted, art investment may soon become accessible to a broader range of asset levels.
Even now, independent art advisor Peter May says that if you have clients with $10 million in investible assets, it’s not unthinkable that $3 million to $4 million of their portfolios could be invested in art.
That 30% to 40% needs risk management and its impact should be taken into consideration in managing the rest of the portfolio.
Art’s emergence has accelerated within the last few years. As the investment community gets behind the movement, further development could happen quickly.
At the very least, knowing about art from an investment perspective can give you another ‘in’ to attracting high net worth clients.
This Website Is For Financial Professionals Only
|
|
|
MEMBER REVIEWS
|
 |
|
William Desormeau, Jr.
|
|
It is not possible for me to overstate the cumulative value that Craig, Bob and Fritz have added for over 10 years to my investment advisory practice, as well as for personal and family financial planning. A4A gets my highest recommendation
|
 |
|
Lynn Najman, CFP®
|
|
I’ve subscribed to A4A since its inception, and always find it intellectually stimulating and on point. It’s one of the few CE solutions out there that doesn’t waste my time by pushing product or talking down to me.
|
|
|
| Pete Deacon, CPA, CFP® |
| A4A has had a profound effect on my business. Since 2009, I’ve relied on the consistent messaging and updates to run my business successfully. Being able to present the information from Bob, Fritz, and Craig's ongoing CE webinars has been a significant benefit. |
|
|
| Fredric Mayerson, MBA, PhD, CFP® |
| I've been a financial professional and professor of finance for 35 years and find Fritz Meyer and Robert Keebler to be among the most engaging, incredibly knowledgeable, and experienced presenters I’ve encountered. They deliver an extraordinary amount of information in an extremely interesting way — sequentially and developmentally, utilizing pedagogical tools and techniques that few possess. A4A to is the most consistently excellent CE program available. |
 |
| Ron Roge, MS, CFP® |
| I’ve been attending A4A many years because the CE classes are outstanding, and my time is valuable. Though I have over 35 years of experience, I’m always learning something new on A4A. I attend fewer conferences now because the CE is generally not advanced. If you want to learn from the best, in a faster, easier, and less expensive way, I highly recommend A4A. |
 |
|
John R. Day, CPA/PFS® |
|
I’ve been a member since 2011 and never miss the monthly webinars with Fritz Meyer. I appreciate Fritz’s independent views on the economy and markets and Bob Keebler keeps me updated on excellent tax planning ideas. A4A is a great value! |
 |
|
Norman Politziner, CFP |
|
I wouldn't miss a Fritz Meyer webinar unless my pants were on fire. I've relied on Andrew Gluck's knowledge systems --client communications and CE -- for two decades. It's simply the best solution for tax, financial, investment, and risk-management professionals.® |
|
|
|
Dan Hawley, CFP® |
|
A4A, for over a decade, has been a great resource for useful and accurate information and CE. A4A and Advisor Products are bargains for an advisory practice. |
|
|
Kevin Brosious, MBA, CFP®, CPA/PFS® |
|
I get CPA CE credit and CFP credit for the webinars. But not only that, the A4A content is terrific |
|
|
|
|
|
|
