If You Are Looking For the Ultimate Investment Class, Try Art

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Gauguin Stamp
A stamp printed in MANAMA shows paint "Faa Iheihe" by Gauguin circa 1970.
Gauguin Stamp
A stamp printed in MANAMA shows paint “Faa Iheihe” by Gauguin circa 1970.

When asked to define art, the famous artist/celebrity Andy Warhol said that the real art is in making money. This should not be a surprise to anybody who follows the career of Andy Warhol. He is, after all, famous for saying that in the future, everybody would be famous for 15 minutes. He was definitely ahead of his time.

Considering how crazy the art market has been lately, if would be safe to say that Andy Warhol hit the nail on the head when it comes to defining art. A key component of what constitutes art is market appreciation. As it stands right now, the art market is crazy hot. We are talking about the same market where a Gauguin painting of two Tahitian girls recently fetched GBP 200 million.

There is no shortage of high-value art being bought and sold in global markets. The art market is really hot. Part of the reason why it is so hot is because hyper-rich investors prefer the art market. As you probably are already aware of, thanks to central bank stimulus schemes, the wealth gap is growing. The wealth gap of the simply rich, people who make over $200,000, and the extremely rich or hyper-rich individuals who make $5 million or more a year is growing by leaps and bounds.

It seems that all that stimulus money has only succeeded in making rich individuals who are very familiar with financial markets become even wealthier. Not enough of that cash ends up on Main Street to stimulate real business growth. The white-hot international art market is one testament to this uneven wealth appreciation. If you are looking for an extreme way to invest, definitely look into art.

The great thing about art is that it continues to appreciate, especially if you invest in hot names. Gauguin is a hot name. Cezanne. Van Gogh. Picasso. Interestingly enough, artists who became hot in the 1950s and 60s are also white-hot in their own way. Andy Warhol is famous for not even painting his own stuff by hand, but using silkscreen and having other people do it. His screens and paintings are making a lot of money. If you are looking for a great way to beat inflation as well as a nice piece for your living room, the art market is it.

However, keep in mind that investing in art has its own downside. Just like real estate, it is not very easy to unload. Moreover, you might have to wait for a long time for the right time to unload your artwork. Also, considering the fast rise of art prices recently, you are probably going to have to invest in the highly competitive but also highly uncertain world of recent artists. It is anybody’s guess whether or not the artist you are looking at will turn out to be the next Picasso, Van Gogh or Warhol.

 

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