Why Art Is Growing in Popularity as an Alternative Investment Option
For many people who invest frequently, searching for alternative investment options is the next best step. Many will eventually find their way to the art market. Art investment is an age-old activity that is enjoyed by the wealthiest, the most exclusive, and the most discerning art collectors.
For those in search of an alternative investment to bank on, starting an art collection may be what you need.
Here are some key reasons why more and more people are investing in art.
Art Is Global
Art is a global language that is understood, to a certain degree, by everyone. Investment in art can happen from anywhere. It is available to a worldwide market of wealthy collectors with a growing demand for investment opportunities.
The Market Is Growing
As wealth continues to grow around the world, the demand for art will grow as well. It's estimated that art markets grew by as much as 8% in the years between 1993 and 2009. The global value of this market is now at $3 trillion. As demand for art grows, so will the value of existing investments.
Art Gives Personal Meaning
Many people become interested in art investment because they're looking for a way to diversify their portfolio and increase personal wealth. What they don't anticipate is the way art comes to affect them personally. Many investors feel real and deep attachment toward their favourite pieces. Their love of their art goes far beyond potential financial gain.
As an investor, you can purchase work from the artists that you connect with emotionally. In this way, art is an investment that can be cherished.
At its core, all art is about creativity and expression of the human condition. It is also a documentation of our society. People who invest in art often find themselves personally attached to their pieces. The value of the art becomes more than financial because it reaches into the psyche of the owner.
Art investment incites passion. It is popular because it is both meaningful and rewarding.
Art Is Relatively Low Risk
For a person who knows what they're doing, there's a relatively low risk of losing money on an investment. Although purchasing art made by a new up-and-coming artists could result in a loss, the established masters and art from known entities does not often decrease. People who understand the art market and what it has to offer can safely invest their money.
Art Offers Mobility
Art can be moved from one location to another, it isn’t tied to just one place. People who invest in art may choose to sell to foreign buyers or they may keep their art for the rest of their lifetime. With this mobility comes convenience. Investors with large collections can pick up and move their art to any place, at any time.
Art Has No Minimum Investment
Art can be bought for any amount of money and people seeking to make a small investment can do so easily. This type of investment does require an intellectual understanding of the market as well as an eye for talent, but it does not require a set amount to invest.
On a related note, there is also no maximum investment. For investors with large sums, art is always being produced and more art is always available to buy.
Art Brings In Income
Some investors are able to make money from their investment without selling it. Individual investors can send their art around with travelling exhibits. The art is returned at the end of the tour and the owner makes a sum of money in exchange.
Likewise, art can also be loaned out for a fee (like rent) to individuals holding formal events. In fact, there's always a demand for famous pieces of art and works by famous artists. Investors who purchase pieces wisely and who make the right connections can bring steady income this way.
Art Has Zero Regulation
One of the frustrations of many investors is the stifling nature of government regulation. In the art world, this regulation is virtually nonexistent. Anyone with the funds can invest and sell art freely.
Business tax deductions for artworks are now lower than ever in Australia. The government has extended the $30,000 asset write-off, which means every individual artwork with a value of $30,000 can now be written off. If you’re looking to invest and purchase art for your workplace, now is the best time.
Art Has a Low Correlation to the Value of Stocks and Bonds
The value of art has a relatively low correlation to stocks. Even when other investments may be devalued by economic activity like recession, changes in the stock market, and inflation, art is unlikely to lose value.
Start Collecting at Lyon’s Gallery
If you're thinking about getting started with art investment, now is the time to expose yourself to art and the art world.
Discover your passion for art at Lyons Gallery. Visit the gallery today or check out our collection online.