Successfully invest in art - art as an investment

1. The worldwide art market - an overview in numbers

The global art market basically consists of the primary market - for the first time sold works of art - and the secondary market for resale. $ 50 billion in 2020 and, due to the effects of Coronavirus pandemic (Covid-19), decreased by around $ 14 billion compared to the previous year.

This decline can also be seen in the volume of global art sales 31 million transactions in 2020 , compared to over 40 million in 2019. Since pandemic urges the auction houses and art dealers to strengthen their digital departments, the total turnover increased. The online art and antique market doubled in 2020 compared to the previous year (source: Statista )

2. Art as an investment - basics and characteristics

Art investments go far beyond the simple search for the pretty watercolor for your dining room and the vague hope that this will increase in value over time.

Art can take an important place in your investment portfolio because it serves as a protection against inflation, increases diversification and at the same time reduces the volatility of your portfolio.

Unjustifiably, many investors assume that they are excluded from the art market because they consider art as an investment form exclusively for the ultra -rich. As a result, most private investors have no art as an alternative asset class for classic types of investment .

In addition, the outbreak of Coronavirus pandemic was a challenge for the art market.

"Art as an investment class is usually under invested, since investors only have limited access to the highest quality works ," commented Cynthia Sachs, CEO and Chief Investment Officer at Athena Art Finance Corp.

In addition to the traditional art purchases from old masters such as Claude Monet , for which seven to eight-turning amounts have to be provided for, many alternative investment opportunities for investors have developed over the years.

The participation in the art market and its profits is no longer a question of the available budget. Although 2020 was a difficult year for the traditional art market, online sales a record of $ 12.4 billion , twice as much as in 2019.

In view of the growing art market and the spread of platforms that offer an entry option to this investment, you may be curious how you can benefit from the market dynamics of these alternative asset class.

As already mentioned at the beginning of this chapter, art can perform many functions within an investment portfolio. This makes it an attractive asset for private investors.

2.1. Art as an investment diaperation

First, art can act as a portfolio diversifier. By assigning part of your portfolio to this asset, reduce your risk by distributing your money over different systems.

It plays a major role here that art is an asset class that does not correlate with other important values ​​on the stock exchange. This means that with poor performance of stock market -based assets such as stocks or bonds, alternative systems such as art tend to keep the market value. The addition of art objects acts like a kind of hedge against a bear market on the stock exchanges or an economic crisis.

2.2. Art as a long -term wealth memory

Art as an investment can also be a way for investors to receive their assets, say experts. Art serves as effective protection against inflation and thus gives the value over time.

Works of art are a physical asset, and physical assets tend to perform well in inflationary times. Since we are now going through an inflationary phase in our macroeconomic cycle, art can be very nice protection against inflation.

2.3. Low volatility

Although every investment carries a risk, one of the advantages of art is that it is not a asset that is strongly influenced by market volatility.

In contrast to stocks that react sensitively to market movements, the art market has grown steadily over the years, and traditional physical art tends to maintain or increase their value over time.

You will not experience the same volatility on the art market as on the stock market because the blue chip art market has rare, desirable assets. In this way, art will continue to have a certain support for negative market messages.

2.4. Risk liquidity

However, these benefits can backfire. One of the risks of art investments is the difficulty of liquidity. If you want to sell a physical work of art, do so through an art gallery , auction house , or art collector. This can be a time-consuming process.

Since art is not a frequently bought and sold asset, this poses a liquidity risk that is not in the stock market. This makes art more of a buy-and-holding class.

3. How do investments work in art?

We've learned that while the art market does, to a certain extent, follow the market mechanisms of supply and demand, it develops independently of general economic markets, as reflected in stock exchanges. It follows its own rules.

In principle, however, art, like stocks and bonds, can also increase in value . If an up-and-coming artist embarks on a successful career, the cash value of their work will skyrocket. The same applies to deceased or long-established artists when their perception and evaluation by art experts, critics, and collectors fundamentally changes.

When the value of a work of art increases, it usually does so through a small number of traditional, surprisingly predictable channels: art dealers persuading their wealthy clients to spend more; auction houses enticing wealthy collectors to bid higher; wealthy collectors buying and selling art to each other; and finally, through an ecosystem of curators, experts, galleries, critics, and influencers who contribute in some way to the perception of value.

3.1. There is no art market

Just because a work of art costs less than another does not mean that it is a cheap business. It may be that one work is subject to completely different than the other .

For example, the demand for Ming vases is not comparable to the market for mid-century sculptures, and the added value in the Old Masters market is far removed from that of French Impressionism .

Before you look at an object and decide that it is a great deal, make sure that you rely on this assumption on the sale of suitable, similar objects.

In general, new collectors tend to be interested in paintings, for the simple reason that they are the most obvious and most accessible choice. But you should also not ignore excellent photographs, prints, watercolors and etchings.

Galleries tend to concentrate on works of art from the 20th and 21st centuries.

In reality, as a potential art investor, you have works from 7,000 years of art history to choose from.

4. What you should know before investing in art

4.1. Art is a long -term form of investment

Profits from the sale of works of art increased in value will not be realized overnight. Experts therefore recommend art investments, especially for patient investors with a time window of 10 years or more. So better think of art in the long term.

Many art investors include paintings in their estate planning to pass them on to their heirs.

4.2. There is no guarantee - there is a risk of loss

Every work of art is unique and the art market has ups and downs like any other market . Unsurprisingly, this form of investment is also subject to a certain risk.

Since it is impossible to precisely determine the true value of a work of art, even for proven experts - a lot depends on the reputation of the artist, on the economy as a whole, but also from many individual and personal factors - you should always be aware that you always take a certain risk when buying art. That cannot be completely avoided.

Even insiders of the art world are just as often next to it as analysts for forecasts for the development of the gold price. No artist, as he may be, is an absolutely safe bank.

Also an art purchase is not yet a guaranteed profit, even if the artist's works are at home in living rooms, salons and lofts of renowned collectors, are at home in the best museum collections in the world, or the praise of glowing reviews in the press overturn.

Have you ever heard of Robert Yarber, whose work the late New York Times critic John Russell described as "undeniably convincing" and whose art is in the constant collection of the Whitney Museum? No, then you feel like most. Do you notice something?

Or could you have predicted that Fernando Botero - the second most successful artist at an auction in 1993 - would soon be put in the shade by Jeff Koons?

Or that the Jeff Koons works would also come to a standstill?

However, unlike other forms of investment, regardless of any changes in value, you will still own a wonderful work of art that, in addition to its quantifiable cash value, will always have an intangible value and will continue to allow you to use it to enhance your living room.

4.3. Art should only make up a small part of its portfolio

If you are not only concerned with hobby, but consider the purchase of art as a serious investment afterwards, then you should definitely take this advice.

For most long-term investors, art will only make up a small fraction of a well-rounded investment portfolio. You can profit, the risk is manageable, but it's very unlikely that you'll generate a significant and secure return from art alone.

Think of it like a real estate investment, which serves as a useful complement, but isn't essential. Don't rely on an art investment alone to generate a stable income .

4.4. Limited liquidity

We've already touched on this topic. However, it's important to remind you again at this point that art is not an easily liquidated asset; rather, it's an illiquid asset. This means it's difficult to immediately convert an object into cash.

Liquide means such as stocks, bonds and overnight money can be converted to cash much faster. Illiquid assets such as real estate and art take much longer to sell them, even if they have a high monetary value on paper. A suitable buyer must first be found.

Although it is of course possible to sell works of art, most investors rarely do this. An auction house, the best choice for the sale, often requires high fees. Since art prices fluctuate regularly, there is no guarantee that the sale will bring you a profit. Therefore, the holding times are often 10 years and longer. Art tends to tend to be a wealth memory and a long -term investment object.

5. Forms and investment strategies

There are various ways and approaches to invest in art. Each of them has a different risk and earnings potential.

5.1. High risk and high price

You can buy original works at auctions, galleries, and art fairs ; however, this comes with the highest price and the highest risk. You can also try to buy works by an emerging but still relatively unknown artist, hoping to discover the next Banksy before anyone else.

If your assessment proves correct, the value of the acquired work should experience meteoric growth. However, the far more likely scenario is that the young artist will soon disappear into the crowd and the attention of the art world will simply move on. In that case, your investment will not have been worthwhile from a monetary perspective.

One day a unique painting or a sculpture could be worth much more than you paid, or you can have great difficulty selling it at a given time. In the end, the work of art could only be a very expensive home decoration.

5.2. Low risk and low price

Instead of buying a high -priced original, you can alternatively choose to buy original painting or an original drawing

A high -quality pressure in a limited edition can be very valuable and costs a fraction of the original price. However, since printing are usually not unique, they do not gain value to the same extent as the originals.

The best pressure is known as a Giclée print . Pay attention to the limit of the limitation. Rarer prints are usually more valuable. Pressure from a small edition (25 or less) has more value and value increase potential than pressure with several hundred copies. Limited works should always be bought with a certificate of authenticity and numbering.

limited editions in paintings, drawings, lithographs, but also in sculptures and sculptures (so -called multiples ).

Reproductions (also museum replicas) are mass-produced copies without a limited edition. They are the cheapest option, but they are also the least worth it. You will probably not see a profit from a reproduction. Here there is an intention to buy, especially if you want to bring a real -free copy into your own four walls as a lover of an expensive and non -affordable work of art.

However, there are also exclusive editions in replicas and reproductions . Even if a replica is no longer manufactured and only a small number of it was sold, one or the other inclined collector could be interested in the decades and be ready to pay a higher price.

5.3. Low risk and high price

You can works by "Blue Chip" artists such as Andy Warhol , Roy Lichtenstein or Jackson Pollock , who generally keep their value better, but offer less capital growth or upward potential.

Blue chip artists are those whose values ​​are the most stable and are no longer subject to trends, fashion symptoms and speculations.

The important thing to remember is that if you want to purchase individual works of art, you probably want to buy ones that will not only make you wealthier but also happy.

If you invest 10,000 euros in a painting that you think is ugly just because you expect its value to increase, then you miss the fun and the joy of investing in art objects instead of investing in less aesthetically coming assets.

6. So you invest successfully in art - do's and boms

If you invest in a work of art, buy it in expectation that the demand for this or similar piece will grow faster than the supply. In this case, the value of the piece increases and you may be able to sell it at a profit.

If you have now made the firm decision to invest part of your available money in art, I would like to give you a few helpful tips and advice. I would also like to protect you from pitfalls that you could cost cash.

Tip 1: It is a great advantage if art is a pleasure for you

Most art investors start small as a collector. If you are happy to go to galleries and are already looking for a great piece for your home, transform this appreciation into an enrichment!

But if you don't like art for your own sake, other investment options may be more suitable.

But you don't have to be a collector to invest in art. You can limit your investments to one or two parts to keep the financial risk minimal.

But knowing about the art world - or working with someone who has this knowledge - is the key if you want to select profitable works of art.

Tip 2: Set a budget

The best way to start starting your budget. Decide how much money you are willing to spend for art objects. It should be an amount that you can afford if the work of art loses value. Also, do not forget to consider possible storage and maintenance costs.

Tip 3: Just invest money that you don't urgently need

This rule basically applies to any form of investment. Welcome all profits, but do not plan your financial future on the potentially achievable profits.

Money that is intended for retirement, for example, should flow into other assets.

Conclusion: Do not invest anything in art, the loss of which you cannot afford in the worst case.

Tip 4: Develop your expertise

Then learn as much as you can about the art world to build essential foundational knowledge and develop a feel for the art market. Visit local galleries and see what they have to offer; talk to curators, who are usually happy to answer your questions. Interacting with other interested visitors can also provide valuable insights.

Art fairs, exhibitions, vernissages and art events are other worthwhile destinations.

Browse websites like Artnet or Artsy , and online auction houses like Sotheby’s , to get a feel for how the market works and what price ranges are reasonable.

Tip 5: Determine the market value (let)

Start researching the artist of the work that you consider. Ask the following questions:

• Are the artist contained in well -known museums or famous collections?
• Has the artist received awards or other recognition for his work?

While aspiring artists can be exciting, their reputation can be permanently or not. This affects the value of a work directly.

As soon as a certain work or an artist catches your eye, you can narrow down your research to see how much a certain work of art costs. In addition to your own research on the network, you can also use relevant service providers for evaluating a work of art, which of course is associated with costs.

Art experts turn to the promising smartphone app "FIND ART – SHAZAM FOR ART – REVERSE IMAGE SEARCH ." Like an image search engine, it offers art enthusiasts and potential investors a wealth of details and up-to-date price information. Simply take a photo of the artwork and let the app do the research for you.

Tip 6: Exam by an expert

Your next step should be to have the artwork assessed by a professional expert in order to determine its quality.

Estimation, evaluation and reliable value assessment of works of art should be left to professionals because the smallest details can make the difference.

The provenance, i.e. the origin and history of the former owners, can also play an important role in the valuation.

Qualified providers of valuable reports usually have access to extensive databases and archives to support their results on a solid basis.

Tip 7: You can afford the maintenance

Art investors can control their assets, which can be a bonus. But you're responsible for keeping the artwork in pristine condition , which means monitoring factors like humidity and sunlight.

If you want to issue or resell the work, you must make sure that it has retained its original quality. If you have it professional, you also pay certain fees for this.

Add insurance costs and the price of a certificate of authenticity and your maintenance calculation slowly adds up.

Tip 8: Think of further additional costs

It's not always easy to grasp the additional costs right away before you make a purchase, so it's important to consider them well in advance.

The various extra costs that must be taken into account when buying and selling works of art include sales tax, transport costs, certification and evaluation fees as well as insurance . Perhaps you would also like to afford a nice framework or another kind of exhibition presentation for your work of art.

Tip 9: Buy directly from the artist

Art galleries take a commission of up to 50%for every sale. So it is reasonable to ask yourself whether you can save money by buying directly from the artist.

However, you must keep in mind that when a gallery adds an artist to its “stable,” it often commits to working with that artist long-term, providing her with money to produce artworks, investing heavily in promoting her exhibitions, and even paying for her work to be shown in exhibitions and museums.

The artist, in turn, is often committed to this gallery for the same reasons. If she has a good relationship with her galleries, she will probably not be open to the sale of her gallery owner of trust.

Nevertheless, contact with the artist can be worth contacting. As is well known, questions don't cost anything.

Tip 10: Buy second -hand

If you buy a freshly manufactured work of art, there is a possibility that there was a person who does your best to live from the proceeds of your art. As a result, the costs for the life attitude of this creator (not to mention the material costs) are included in the price, which is why even paintings on the walls of simple cafés can cost thousands of euros.

The easiest way to avoid this? Buy a painting that has already been bought and sold again and reduce the price by at least part . Perhaps a work of art is sold under the purchase price because the owner needs money at short notice.

Check out smaller auction houses , which you can find through websites like Invaluable.com and LiveAuctioneers.com ; you'll still pay a buyer's premium, but the art itself is often comparatively inexpensive. Catawiki a recommended German resource for art auctions .

Tip 11: Search specifically for blind spots

The art market has prejudices that have nothing to do with purely artistic values. Paintings by the Flemish baroque artist Peter Paul Rubens can be sold for double -digit million amounts; His drawings often sell for a fraction of it.

report by Bloomberg, a bronze sculpture by the Swiss artist Alberto Giacometti from the 20th century was sold for more than $ 140 million, while his paintings are sold for much less. In contrast, a portrait of his brother Diego was sold for $ 1.6 million last year. Practical for change!

It is important to remember that these prejudices are not carved in stone and often change as quickly as fashion. So if the early work of an artist is currently being sold with a surcharge, you instead consider your later work.

Generally speaking, if a certain artistic period is noticed at the moment or is suddenly undesirable, there is a good chance that it will be fashionable in a few years.

Just because something is very old does not mean that it has to be unattainably expensive. A 2,600 -year -old Etruscan lion figure was sold last year at an auction at Sotheby's for £ 10,000. In the same sale, a 2,300 year old gold goal que (a stiff necklace) was sold for £ 11,250 or about $ 1,000 less than a new 18-carat gold chain at Tiffany.

For a millennia -old gold figure, sometimes less than if it were melted down and sold as bars.

Tip 12: Buy art online

Since we are finally in the information age and digitization is one of the megatrends of our time, works of art are also reinforced and now sold online in large numbers.

It is in the nature of the Internet that costs are saved via this sales route and thus passed on to art buyers in the form of cheaper prices - also due to high competition.

So in any case, keep an eye out for your collection on the net.

But before you buy the internet, make sure that you buy from a reputable gallery, a trustworthy dealer or an established auction house.

In addition to a look at the imprint, press reports, mentions on large, reputable news platforms and trust seals can also provide information about the trustworthiness of a provider.

A detailed guide to buying art online can be found here: Buying artworks online – 10 essential tips for your art purchase online

Tip 13: Check the price history

As is well known, one says "The Trend is Your Friend" . Following this logic, it should be promising to take a closer look at the price development of works or artists in the past.

In German-speaking countries, you can look at the price histories of artists such as Gerhard Richter , Anselm Kiefer , and Andreas Gursky . The prices of their works rise from auction to auction.

Another helpful indicator of the price development at the art market Mei Moses Fine Art Index developed by the two New York professors Jianping Mei and Michael Moses . For this index, original sales values ​​of concrete works of art (mostly paintings) are compared with the later revenues at the auction houses of Christie's or Sotheby's. The result is then a continuous price measurement.

7. How do you rate art investment options correctly?

Art is a versatile market. Therefore, according to experts, it is elementary to understand artists, their markets and dealing with art.

It's helpful to familiarize yourself with a favorite artist, their career, and their biography. This way, you can see how their brand has grown and whether this growth is sustainable and likely to continue.

As you conduct your due diligence (a thorough, qualitative, and data-based review), you should focus on artworks that have been traded multiple times. This way, you can see if you can identify clear patterns or reliable comparisons regarding growth rates.

In view of the fact that you will probably keep a work of art over a few years, understanding the performance and performance of similar works or artists can be a helpful yardstick for which returns you can expect.

Experts suggest to take several helpful data points into account when evaluating art : First of all, you have to consider whether there is a demand for art collectors to buy the works of the artist.

If top collectors regularly buy exhibits from an artist, it is a strong signal that works by this artist will continue to be estimated in the long term. Also increasing a general awareness and popularity of an artist also increases the opportunity to find a suitable buyer later quickly.

Peripheral costs also be taken into account when investing in physical art. As already listed, these include the financial expenses related to maintenance, maintenance, protection and insurance. Especially with costly works, these extra costs can be noticeably significant.

In order to fully determine the value of a work, these costs should be taken into account.

8. What art investors should know about NFTS

A new area on the already young market for digital art are NFTS or non-fungable tokens. These works of art are non-physical, digital forms of information technology traceable and verifiable works of art.

The advantage of an NFTS (also crypto art or cryptocunation ) is to have works of art with digital integrity that cannot be replaced.

NFT Art is based on the blockchain network . This blockchain offers transparency, authenticity and more liquidity, which means that investors can easily carry out transactions.

Some of the world's most sublime works of art by artists such as Leonardo da Vinci , Vincent van Gogh , Monet and others are now available NFT market

Even emerging artists quickly noticed the advantages of digitization of art and jumped up on the rolling trend train. Mike Winkelmann, who is known under the pseudonym Beeple , is an NFT bestseller artist who auctioned "Everydays" for record-breaking $ 69 million the day of mirrors reported ).

While this record sum was achieved amid media hype, NFTs fundamentally allow artists to sell their work directly to consumers and give individual investors access to that work in a vast, open marketplace.

Cryptocunation offers a new approach to invest in art with which many people are still little or not familiar at all.

The following three points offer you a rough guideline for taking your first steps in this new, still very dynamic market segment of digital art:

8.1. Visit an NFT marketplace

Investors who are interested in art NFTs should visit relevant websites that enable them to buy directly from artists. Alternatively, you could visit a marketplace that offers art NFTs.

OpenSea is a good marketplace that aggregates NFTs from a variety of marketplaces. It can also be a good idea to go directly to a specific marketplace like MakersPlace, Decentraland, Rarible, SuperRare or the Enjin Marketplace , as they often provide useful information about the art itself.

Upshot, a crowdsourced NFT valuation platform co-founded by Nick Emmons, offers a highly exciting approach to determining the value of crypto art. At its core, it creates a protocol that uses valuation games to incentivize people to honestly answer subjective questions. Upshot's first product aims to provide an efficient pricing mechanism for NFTs by paying experts for honest valuations.

8.2. Get a digital wallet (wallet)

Regardless of the platform used to buy this asset value, you need a digital wallet (so -called digital wallet) , which you have to equip with credit for the transactions.

Since NFTs are typically an asset based on the Ethereum protocol, you can use so-called ether tones as a means of payment .

8.3. Select your favorite work of art and submit a bid

After setting up the wallet, you can search the NFT marketplaces and purchase the desired crypto art artwork.

It is then usually made available to you in digital form.

8.4. Another important note

With NFTs, it is crucial to invest in works created by artists who have a long-term vision of what they want to do and achieve with their art in order to create value.

Experts encourage investors looking to get creative with art NFTs to explore emerging technologies that specifically support the creator economy . For example, they should look at stocks that enable, drive, and fuel this transformation and this market.

9. Alternative opportunities for direct art purchase

In the past decades, a number of alternatives to traditional investment types have developed on the art market as a result of the technological changes, which enable almost everyone to benefit from increases in value from works of art.

9.1 Fractional Art Investing: Buy investment share of works of art

You can either buy a work of art yourself-often the more expensive option-or buy shares in works of art via an online marketplace.

Recently, a new way of buying art has emerged: "Fractional investing." The basic premise is that valuable works of art appreciate more (and faster) than "cheap" works, and if many people pool their money, they can participate in these above-average returns.

Apart from the advantages of a tendency, there are some inevitable disadvantages of fractional art investment. Perhaps the most serious is the fact that investors in this case never physically take possession of the art and can enjoy it.

This alone contradicts the primary appeal of art collecting, namely viewing and enjoying the work of art one owns.

9.2. Investment platforms for investment share

Digital platforms like Yieldstreet and Masterworks allow you to buy and sell fractional pieces of various types of artwork, so you don't have to write a sizable check for a single piece of art.

Masterworks is a great option, especially for the inexperienced art investor, as they do most of the work for you. Masterworks buys paintings and sells shares to investors, keeping them updated on the progress of the investment. The platform provider acts similarly to a fund manager in the stock market, acquiring blue-chip art at auctions on behalf of its investors.

He establishes a holding company for each work of art to acquire, store, promote, and resell it profitably. This company is registered with the SEC and issues shares to those who wish to invest in that particular work of art.

This securitization of artworks makes investing in art more affordable and the market for the artworks' shares more liquid. Investors can buy and sell shares much more easily than buying and selling the artworks themselves. Of course, this involves a fee for Masterworks' services.

At Masterworks you do not have the work of art in the physical sense and need nothing more. You can also spread the risk of several works, artists or styles.

With several other investors, you acquire shares in high -quality works that experts check for authenticity. Masterworks has no specific minimum investment amounts; These vary depending on the specific investment offers available at the time of their system.

Similar marketplaces are Maecenas (where you can buy shares in paintings) and Saatchi Art (where you can browse online directly and buy works directly).

9.3. Art fund

There are fewer than 100 art funds worldwide, most of them in China. A well -known European provider is "The Fine Art Group" , which is also represented and active in Germany. The provider has a lot of experience with art as an investment.

Art funds are usually closed funds, i.e. with limited investment, mostly with entrepreneurial participation. In addition, they are linked to minimum contributions and are therefore not an option for every budget.

The Fine Art Group offers so-called co-investments . Investors can participate in investments in individual art objects - with a typical investment period of less than 24 months.

Alternatively, art investors are also available in a “private account” with a longer time horizon and investments in various objects of art. Minimum deposits of a remarkable $ 3 million are due for the private account. For this, long -term return is promised.

These funds are not tradable via conventional brokers.

9.4. Art indices

Companies such as Sotheby's (NYSE: BID) and Christie’s , who art as an investment , often quote Art 100 Index from Art Market Research to justify their starting bids.

The index, which pursues the sales of 100 artists in different regions, styles and epochs of 22 auction houses around the world, can give a comprehensive impression of how the global market for works of art develops.

In 2018, Artprice his Artprice100 index , which focuses on Blue Chip artists. Motley Fool reporting, the company states that the index has grown from 2000 to 2017 with an average annual rate of 8.9 %.

In the meantime, the S&P 500 grew less than half in the same period (which began in particular before the dotcom bubble bursts). On the other hand, the S&P 500 the Artprice100 in 2018 and 2019.

There are some problems with these art -oriented indices. First, only take into account the auction prices of the works sold. All costs associated with the investment in works of art are not taken into account and would certainly put a strain on the performance of art as an investment.

The second problem is a phenomenon called "selection distortion" Art market prices do not update every moment or day like the prices of securities that are traded on the financial markets. Kunstindices are based on the available auction data. If a work of art never sells, then there is simply no data. And the works that are not auctioned are often less worth less than the last buyer paid.

These indices thus show higher returns than those prevailing on the entire art market. The indices are "biased" in order to only take into account the winners.

9.5. (Yet) no ETFs

Unfortunately, there is no (yet) Exchange Traded Fund (ETF) or investment funds traded on stock exchanges for art. The concentration of an ETF or investment fund on art is apparently not practical or economical due to the illiquidity of the art market.

The singularity and the inherent scarcity of art prevent fund managers from simply buying more renoir or basquiat paintings, as they could be at stocks in order to satisfy investors with increasing demand.

If many shareholders of an artificial fund wanted to return their shares, the illiquidity of the art market would prevent managers from selling the fund's assets without further ado.

However, the past has taught us that things are only impossible until someone comes and the opposite proves ...