The value of fine art can be found in its aesthetics and in its role as a hedge against inflation, and both can play an important role in helping you to reach any wealth or philanthropic goals you may have. As inflation draws near astute investors are bolstering their art collections while prices remain depressed. When inflation cools, if they so choose, investors may then cash in on their hedges. The last time inflation spiraled out-of-control, from 1977 to 1982, fine art prices soared a healthy 130 percent. Since 1997 fine art has actually tracked inflation better than Gold, with a 0.26 correlation against Gold's 0.24, where 1 means prices move perfectly in tandem. During times of recession, fine art, like Gold, historically outperforms traditional financial investments. At Tangible Investments, our wealth strategists understand both the emotional and financial impacts associated with the purchase and sale of fine art. An investment in fine art is an excellent example of investing in an asset that you can enjoy and which may also bring you personal reward.
Financial professionals agree that due to the state of the global economy, asset diversification is the key to successful investing, and owning fine art, like Gold and Silver bullion, can be an important part of a well-diversified portfolio. There is also growing acceptance from banks for the use of fine art as collateral for loans.
In addition, the staff at Tangible Investments has extensive experience helping clients evaluate the various wealth transfer options available, from gifting artwork to family members, donating to a museum, or even starting a museum with an existing collection. The Financial Times reported that over the past 50 years an investment in fine art returned results in line with the S&P 500, according to the Mei/Moses Art Index, which tracks thousands of works sold at auction in New York. Between 1954 and 2003, art returned +12.6 percent, according to Mei/Moses against +11.7 percent for the S&P.