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The Art of Smarter Wealth Management (PART 1)

The Art of Smarter Wealth Management (PART 1)

Investing in art doesn’t have to be about having a frivolous investment portfolio. It may be a smarter move than placing your wealth in stocks and bonds, says Randall Willette

April 12, 2011 12:42 by

  • The second strategy is pursued by those leading art dealers and auction houses that seek superior short-term returns. Transactions of this nature are considered propositions with increased risks and rewards and often involve the creation of trading opportunities that allow investors to buy and sell works quickly, so they can achieve an immediate return.

The process of determining where assets should be allocated include a thorough assessment of art market conditions, global economic conditions, the availability of attractive investment opportunities, and suitability of investments to the risk/return profile of the investor.

The last few years have seen the development of art price indices that have aided the comparison of art to other assets such as equities, bonds and gold. The MeiMoses All Art Index and Art Market Research are among the most widely quoted. Both are reliant on data from the sales at the main auction houses, due to an absence of data from the dealer market and private sales.

Investors must make themselves familiar with the risks associated with the purchase of individual works. These include questions of authenticity, title, condition and provenance. Expert advice from both the commercial and academic art world is often required and experts’ credentials should include membership of officially approved associations; vetting committees for major international art fairs; and their acting as consultants to major museums and collectors.

Randall Willette is Founder and MD of Fine Art Wealth Management. This article is originally published Knight Frank’s The Wealth Report 2011 on page 54.

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1 Comment

  1. Deidre on April 15, 2011 7:42 pm

    Excellent points made here, especially in regards to the art indices. It can be a challenge to get information about private sale transactions and so many investors end up making decisions based on auction results only which is a skewed version of the real value of a work.


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