|
In
2005, the global turnover of Fine Art was $4 bn, compared
to $3.6 bn in 2004. The artwork in the US gained 27% in
2005 more than they were in 1990. Conventionally, art collection
has remained the province of wealthy individuals in generating
intangible rewards (more than financial rewards). But now,
the art investment funds represent a new relationship between
art and commerce allowing small investors to enter the art
market. Though the investor does not get the painting in
physical, these funds do enable them to gain profits. Now,
art has become an `alternative asset class' like gold, wheat
and other similar commodities.
Generally,
art is of two types: Collectible art and investment art.
Collectible art does not mean they are not an investment
avenue. Some people, who admire art, have a passion for
them and they collect such pieces of art as and when they
find them. While choosing such an art, the collector generally
does not think of it as a source of investment. It's just
his desire to possess it, feel it and later gift it to his
heirs. No one can guarantee that the receiver would also
keep it as a collection and there are chances that the same
piece would be sold for a handsome profit. These art pieces
may be the creation of famous or not so famous artists.
Investment
art are the art-pieces where skills override emotions. The
investor takes into account various parameters, i.e., theme
of the art, painting style, credibility of the artist, colors
used, past works of the artist and so on, before investing
in the art piece. The investors strategically consider the
present investment amount; the future demand for the art-piece;
possible return on investment; and risks involved. Based
on these measures, they plan their alternative exit strategies. |
