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Investing Smart in Art

Are the most expensive artworks the best investment options?

Published: Jan 22, 2014 06:39:21 AM IST
Updated: Jan 16, 2014 02:56:49 PM IST
Investing Smart in Art

When a Francis Bacon triptych of his friend Lucian Freud sold for $142 million in November, it was heralded as the highest-ever price for a piece of art at auction. But adjusted for inflation, it didn’t top Renoir’s 1876 painting of a Paris dance crowd, which brought the equivalent of $154 million in 1990. And those numbers don’t reflect the fluctuating values of the art market as a whole, shown as the red line that represents a newly released index of 21,000 works compiled by Stanford finance professor Arthur Korteweg. Though an index fund (the blue line) doesn’t give the pleasure of a work of art, it is a safer investment. The grey bars show the highest-priced works auctioned each year, adjusted for inflation.

David Nahmad
Billionaire Megadealer
If you know what you are doing, art is the best investment. You have to buy an A-plus painting or something that is not hyped. The super-rich people pay stupid prices for the best paintings, and they fight for the same paintings.

Donald Rubell
Co-Owner, Rubell Family Collection
The real breakthrough for us occurred sometime around 1979. We’d go to 30 studios a month. If you were lucky, in two or three months you’d find one artist who was interesting. All of a sudden in 1979 every week we were finding [ones we liked]. We bought Cindy Sherman for $25.

Norman Braman
Billionaire Car Salesman, Art Collector
I don’t recommend people buying art as investment. I think it’s a huge mistake. I don’t know one individual who bought art for investment who has come out well. It’s just the wrong approach. Art is special. We love our art.

Click here to view the full art map

(This story appears in the 24 January, 2014 issue of Forbes India. To visit our Archives, click here.)

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