Art has a unique ability to remain stable during economic instability due to its low correlation to more traditional asset classes like stocks and shares. The evidence suggests that art does not rise and fall with the stock market, like most traditional assets, which means when your stock investment’s not doing great, your art portfolio may be booming. If you want to keep your portfolio well diversified to minimise risk. The art market is a great place to start.
With the global economy growing ever more volatile over the last few decades, investing in art has become one of the most impactful investment trends. Art has become a better option for a savvy investor than commodities like bonds, precious metals, and stocks.
At the London Collectable Club, our advisory team wholeheartedly believes that when you become an art investor, you gain more than just a lucrative investment that will grow your wealth, You also have the opportunity to become part of a much more diverse cultural community.
The art market has had outstanding results over the last 20 years, with a 2100% increase in auction turnover. At the same time, it offers you something different from the stock market, ISA’s and bonds by being one of the only assets that you can enjoy the cultural aspect of while it increases in value.
Post-war contemporary art is a great place to start because of the quality of the work produced and the increased demand.
If you own a Hockney, a Warhol, or an Alan Davie, you’re not just showing that you have a great eye for investment, you’re also showing your taste and appreciation for contemporary arts.
The attraction to works from this era attracts an increasing collector base looking to purchase some of the most iconic works from our time.
In recent times the art market has grown rapidly in value with a 141% increase in asset value in 2019.
Sales of contemporary art have continued to rise and we’ve seen many post-war contemporary artists break records over the last few years.
Art Market Resilience:
Art performs better in periods of high inflation or rising inflation than other financial assets (analysis between the years 1973 and 2012)
*Saatchi 2016
Financial Correlation
Out of the first-class assets available to investors, art can mitigate risk thanks to a very low long-term correlation with the S&P 500 index, as seen in 5-year data between 2015 & 2020
Source: Report-Sales Pair index of contemporary and Post-War using Core logic Case Schiller Home Price Indices methodology from Standard & Poor,s. Updated data in July 2020
Key Statistics
$65.1 Billion
Following its biggest fall in sales in 10 years in 2020, the global art market recovered strongly in 2021, with aggregate sales by dealers and auction houses reaching an estimated $65.1 billion, up 29 % from 2020, with values surpassing pre-pandemic levels in 2019.
14% Return
Contemporary art has offered an annual return of 14% over the last 25 years, as of December 2020, versus a 9.5% annual return from the S&P 500.
$195 Million
In May 2022, Andy Warhol’s Shot Sage Blue Marilyn became the most expensive 20th century artwork to sell at auction, selling for $195 million at Christie’s.
Over 85%
85% of high-net worth investors cited portfolio diversification as a key driver for investing in the global art market.
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Why invest with London Collectable Club?
The London Collectable Club is a private collectors club based in Greater London. We aim to build long-lasting and fruitful relationships with our clients, investors and collectors to create a community beyond the traditional art gallery approach.
We always strive to deliver a first-class service to our clients and uphold our high standards of professionalism when conducting our business both online and in person.
We obtain highly sought-after artworks at competitive prices from our network of suppliers, dealers and galleries. Our advisory team all have extensive knowledge of the art market and other alternative markets and strive to deliver this information into profitable results for our clients.
The London Collectable Club will offer access to investment-grade art in the post-war contemporary sector and narrow our focus to artists who’ve been collected by and displayed at major galleries like The Tate and The British Museum.
In addition, our team will offer a complete range of premium galley services including framing, hanging, delivery, storage and more – allowing our clients to enjoy their investments at home.
Reasons To Invest In Art:
01: Art Investments Are Fully Asset Backed:
When you invest in art you become the owner of a tangible asset which will retain a residual value unlike any other assets such as stocks and shares. You are also able to enjoy your investment by hanging it in your home or office.
Yes investments are about growing your wealth with minimum risk – but art is one of the only assets you can enjoy as a cultural asset while it goes up in value.
02: Portfolio Diversification:
The global art market is impressive because of its independence from the worlds major stock markets. It is an excellent way to diversify an investors portfolio in times of economic uncertainty. In the graph on the following page, prestigious auction house Sotheby’s have compiled data depicting how the overall value of art has steadily grown for the last 70 years.
03: Art Provides A Hedge Against Inflation:
Another excellent way to navigate economic uncertainties as an investor and avoid losses is to invest in art as opposed to other assets.
04: Art As A Growing Investment:
Investing in art has a historically high success rate. As seen in the graph on the following page, the index value of art assets is projecting higher than any other investment asset (even after the global economic turmoil of 2008/09) including, but not limited to, Real Estate.
Portfolio Diversification
(Graph showing the Sotheby’s Mei Moses Index for the broader art market from 1950 – 2018. The Index benchmarks at 1 in 1950 and shows the trajectory in demand for the overall market, a compound annual growth rate of 8.8%)
(Graph showing the striking recovery following the 2008/09 economic crisis, based on the top 500 artists in comparison to the development of real estate prices, as well as the Standard & Poor’s 500 stock market index.)
Alan Davie – The Prayer
142%
Above Auction Estimate
Sold Price: £60,480
Auction Date: 23 Mar 22
Auction House: Christie’s
Alan Davie – Yum Yum
139%
Above Auction Estimate
Sold Price: £47,880
Auction Date: 30 Jun 22
Auction House: Sotheby’s