Art can beat Stocks!
If you're very careful, art can beat stocks as an investment
According to Phyllis Furman of the New York Daily News, the art market is hot. Prices, especially in sizzling areas like contemporary works, are rising through the roof.
“The stock market’s lackluster performance in recent years has made art look better than ever to investors looking for higher returns.”
In fact, according to the Mei Moses Fine Art Index, which tracks reported art sales — that means sales of artworks at big auction houses— the annual rate of return on art over the last five years was 7.3 percent. Over the same period, the S&P 500 rose just 2.4 percent.
Even collectors who don’t have a huge wad of cash to spend are finding ways to get in on the action. Mike Rossner, the managing editor of the Journal of Cell Biology, is no Park Avenue art collector. But so far, this Ph.D. is on the winning side of art investing.
Over the last four years, Rossner has spent $30,000 on art. His collection is now valued at $45,000, a 50 percent increase. That’s huge compared to the paltry performance of his retirement account.
If you are passionate about art and want to start collecting, keep in mind the following guidelines from accountant Ginger Broderick, who advises art galleries and other businesses on managing money:
1) Collect the works of living artists. You will be assured of buying an authentic piece of work and will have the great satisfaction of supporting a favorite artist.
2) Take a look at your home insurance policy. Most often, artwork would be covered by your home insurance policy. Keep a record of your purchase that includes the date you bought the artwork, its price, and where you bought it. If possible, get the artist’s certificate of authenticity and put it in a safe deposit box.
3) But your homeowner insurance policy may only cover artwork up to a certain value. If your collection exceeds that value, you might want to purchase more insurance.
4) Beware of fakes and reworked pieces. Be wary of unscrupulous dealers who delight in scamming art buyers.
5) If possible, Purchase directly from the artist. (Thanks to a ground breaking agreement, when you purchase from www.verdultgallery.com or www.verdultonline.com, you are purchasing directly from the artist.)
6) If you can’t purchase an original start your collection by purchasing prints.
Alton Perkins,
CEO of Wealth Enterprises Corporation/Yazzy's Fine Art Corporation
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