Don’t be afraid to create your (art) investment

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We all know that the money in your savings account isn’t getting that much bigger with time. You’ve purchased real estate, you have diversified your investments, things are looking good, but still not great. I have one answer to this.

Consider the arts.

Huh? According to Cappy Price, a former Wall Street portfolio manager who now consults clients about art, it outperforms in times of economic turmoil and trouble. It outperformed during all the wars of the 20th century. It has outperformed during the past 27 recessions. Outperformed during multiple recessions! Creating your very own sculpture garden is about more than just making your garden and home your very own; it can be about building a legacy for your family.

Most of us think of art as a luxury item that is an emotional purchase. It is time for investors to think outside of the standard portfolio and onto a canvas one. Mike Moses, a New York University business school professor, found that over the past 60 years, the total return on art has been very similar to the return on the S&P 500 stock index.

A stock portfolio is nice, but it does not necessarily look good on a home or office wall.

Not too shabby. Individuals have been creating, investing in and supporting the arts for thousands of years. It should not come as a surprise that investing in a painting today isn’t much different. I am not discussing a newfangled idea, just reminding us of an old-school way of thinking about generating wealth.

Art is not invisible. A stock portfolio is nice, but it does not necessarily look good on a home or office wall. Art is a window into who we are and can make us feel a certain way about the world. Other investments leave us empty. Art is something that pays off daily on multiple levels and in a variety of ways. Purchasing art makes you look good.

J.P. Morgan shares this with online investors checking out its site: According to The European Fine Art Foundation (TEFAF), the total size of the global art market is about $60 billion, which reflects public auction data and an estimate of art gallery and private art dealer sales during 2011. This represents a six-fold increase in size over the past 20 years. Think globally, but purchase art locally.

Consider this: Through the Internet, we can compare pieces and artists in the same way we research the value of stock. We all have the power to look at art by similar artists and make an informed decision in the same way that we make any other investment decision. We now have the technology at our fingertips to research the value of art in the same way that we create a mutual fund.

Online, an investor can purchase art in installments. Through PhillyArtExperience.com, an art buyer can view 10 instructional videos on the subject. Art of all price ranges is made available and common myths about the art market are dispelled.

Last month, Amazon joined in on the action. The New York Times stated: “… the online retailer announced the start of Amazon Art, where customers can buy original and limited-edition art from more than 150 dealers and 4,500 artists, ranging in price from a $10 screen print by the up-and-comer Ryan Humphrey to a $4.85 million painting by Norman Rockwell.”

This is an exciting and interesting prospect for artists and collectors alike, and we have to assume that free shipping is a possibility, right?

Did you know that the nonprofit arts industry and its audience have a $72 million economic impact in the Pikes Peak region each year and generate 2,168 jobs? Support the industry that increases the beauty and complexity of Colorado Springs and its neighboring towns, invest your money wisely, enjoy your purchased piece and sleep well knowing that you are keeping the arts alive in your community.

What a payoff! Forget getting a broker and instead get yourself a Warhol or a Liese Chavez. You know you want to …

Natalie Johnson has been executive director of the Business of Art Center in Manitou Springs since the summer of 2012.

2 Responses to Don’t be afraid to create your (art) investment

  1. Any chance you could tell me where you got your data for the Pikes Peak Region? I would really appreciate that. I have data for the Front Range that includes Denver and PPR, which indicates the billion dollar arts industry.

    Thanks.

    jl
    September 10, 2013 at 9:46 pm