Art Market Solutions, Art Buying Ingenious
T : + 44 (0) 207 293 0320 / M: +44 (0) 777 648 6390
Art is received as an asset class. Investors recognize art as a hedge against inflation with long term return potential which can on occasion outperform the stock market.
High quality art is an international currency immune from local market and economic conditions. Growing global wealth and new buyers should continue to drive demand for art and price appreciation. Art shows low and negative correlations with stocks and bonds which suggests that art can effectively diversify an investment portfolio. To limit risk and diversify a portfolio using mean-variance optimization twenty five stocks would be considered. In my opinion I would add half a dozen pieces of fine and decorative art such as English & French furniture, Chinese ceramics, European porcelain alongside fine paintings.
Econometrics literally means “economic measurement” A highly effective investment tool. We measure the performance of your art works and their relationship to economic
Variables and other assets and portfolio optimization.
Econometrics is used to answer the following questions:
- I wish to invest in art how do I construct a portfolio to limit my risk and maximise my returns?
- Prices in the art market are going from one high to another, which art offers good value?
- We advise clients on the following points and more. We go from ART GENERAL to ART SPECIFIC
- A client quote. We are hoping to invest. My questions are:
- Would you agree with the price level as he is becoming known as an artist now?
- Is it likely that his art work will go up in value?
- In the event that we would like to sell his work later on is this an easy process?
- What are the considerations before purchasing expensive contemporary modern art?
We construct investment portfolios of fine and decorative art using a mix of traditional art valuation techniques and the best econometric valuation, analysis forecasting methods to manage risk and returns
This masterpiece by Raphael c1505 showing Mary, infant Jesus feeding a lamb belonged to my client who lived in Monaco
We model artwork values and prices using time series analysis & econometric methods
We use financial and statistical models to analyse, value, price, forecast art markets
Eg: If stock markets move up, forex rates move down what is the value of my Picasso NOW?
We calculate the crucial difference between art price and value to determine if an artwork is undervalued or overvalued We decide to buy sell or hold.
We spot MISPRICED ART (OVER/UNDER PRICED)
Art Trader: We calculate mispricing, (low, fair, high price) in the fine & decorative art markets.
We also arrange access to art auction guarantees auction sale advances or art loans
Though tastes are slow to change in well established art markets with broad collecting bases, changes in economic and financial markets which are significant determinants in the formation of art prices –are not. This is why auctioneers forecasts show less volatility than hammer prices. A premium price is paid for works of art which are fresh to the market. The more recent the artist the easier their work can become devalued. With modern and contemporary art returns are high along with volatility or risk of 50% High risk, high reward. The difference in price between an artists average work and his best effort is considerable. High quality art is more resilient to erosions in value. What defines art quality is of course subjective but in practice poses a challenge the more recent the artist or art category.
The right time to buy or sell?