Antonio “Tony Herbosa” haggling for an art piece at Art in The Park event. Photo credit to Winston Sumalia
If you have invested in the stock market or made a lot of money during the seven-year bull run, chances are, you also have invested in art or have at least considered it as an alternative asset class. Not that these are similar. In fact, they are two entirely different animals.
Unlike stocks, art is not a liquid asset. Also, unlike stocks, art pricing is not as transparent. There’s no real-time price discovery and no real-time marketplace.
But if there’s one thing that binds these asset classes, it is their potential to be appreciated—and, therefore, bought—by a similar audience. We’re talking about the investor with a long-term view; one with enough cash to spare and has the time, passion and discipline to hunt for pieces which will likely be more valuable in the future.
In many ways, hunting for the right pieces of art is similar to sifting through the rubble of stocks to determine which ones are mispriced. Thus, some argue that the same discipline and strategies used in buying stocks can be applied to investing in art.
BUSINESS
BUSINESS
BUSINESS
There is also parallelism between art and stocks when it comes to the classification of artists. If items made long-departed masters like Renaissance man Leonardo could be regarded as the “blue chips” that command the highest prices (assuming there’s any for sale), there’s a long hierarchy of artists—old masters, young masters, contemporary artists and newbies—whose works are dealt with at varying price points.
And because the value art is in the eyes of the beholder, pricing isn’t as simple as counting the passing of time. Some so-called second-liners could become more valuable than the traditional blue chips.
