Investment Art: A Beginner's Guide

Forget your shares portfolio - the recession-dodging art market is increasingly proving to be the most profitable place for high-stakes investment

Oscar Wilde may have been mistaken when he claimed “all art is quite useless”. A new use for art has been emerging in recent years, and it may be the most pragmatic of all – as a solid investment. In a time when stock markets are sinking, debts are rising and the looming threat of double-dip recession cannot be entirely eliminated, the art market still sporadically dazzles with record-breaking profits. The unique economic buoyancy of art has long caught the eye of not just aesthetes, but also discerning investors.

Art now falls under the category of the "SWAG" asset. The term, coined by analyst Joe Roseman of Investment Week denotes "alternate investments" which manage to defy economic gravity – namely silver, wine, art and gold.

As well as being decidedly sexier than the FTSE 100, the trend of investing in luxury assets makes a lot of economic common sense. SWAGs often outperform other equities in times of economic downturn for several logical reasons. Firstly, they benefit from the uniquely profitable principle of "scarcity economics" (their value is related to their rarity). Secondly, in an unsteady market, people are drawn to stability, and all the SWAG assets are durable – they have a historical precedence of desirability and can be bought and stored almost indefinitely. Lastly, as their returns are not related to the patterns of the stock market, they add a sensible diversity to any portfolio, the literal asset equivalent of not keeping all your eggs in one basket.

So, we’ve all been there - you’ve got a few spare million in the savings account and you can’t decide whether to invest in the Damien Hirst or the Château Lafite. Luckily, help is at hand. The art market’s unique ability to maintain a bubble of prosperity amidst a global recession has given rise to a new type of business – the art investment advisor.

Businesses of this sort were virtually unheard of a decade ago, and yet the demand  for art purely as an investment has seen a proliferation in recent years. As well as increasing numbers of private banks offering advisory services to their clients, specialist companies such as Fine Art Wealth Management and The Art Investor exist to assist buyers on making choices for bespoke portfolios which can maximise returns. Perhaps most significant in this field, however, is The Fine Art Fund. Set up just over a decade ago by Philip Hoffman, this was the first business of its type to invest in art as an asset. Currently, they manage more than $150m of assets and achieved a net annual return of 6.34 per cent over the past eight years.

Hoffman recently told the Sunday Times, “In the old days people invested in bonds, stocks and cash, and now they’re investing in ten different subject headings and art is just one of them ... People don’t look at their gold bars and, in some cases, they treat art in the same way.”

The rise of these businesses is necessary because the unregulated nature of the art market means that it still straddles an awkward line between solid economic sense and a frantic, wild gamble. On one hand, there are plenty of promising statistics: in 2011, the Financial Times reported that the art market made an 11 per cent return to its investors, a frantic outstripping of stock market return. This year, sales have been promising, with impressive prices achieved at Art Basel in June, and there is a wealth of evidence that the top end of the market has been immune to the turbulence underneath it. In fact, over half of the 20 most expensive auction sales of all time have been completed since 2008, indicating an economic buoyancy which overcomes even the recession.

So far, so lucrative. Yet, the mechanics of the art economy are governed by strange, volatile forces which means that it is never a safe bet. Charles Saatchi himself noted “Art is no investment unless you get very, very lucky” in his 2009 book My Name is Charles Saatchi and I am an Artaholic. In many ways the art market is an economist’s worst nightmare. It is wholly speculative and subjective, and therefore constitutionally unpredictable. The valuation of contemporary art, in particular, is based on a collection of changeable and changing opinions. It is constantly affected by external circumstances, and trends are capable of crashing out of fashion just as swiftly as they crashed it. Additionally, it is fundamentally impossible to confirm the value of the market as a whole. Private sales comprise approximately 75 per cent of the total market, and these are almost always undisclosed. “The art market is the most illiquid, opaque market in the world,” explained Jeff Rabin, quoted in The Art Newspaper. Given this, manoeuvring within it is always going to be a guessing game.

Other industries have, too, sprung up in reaction to the demand of fine-art investment, notably the specialist storage port. Investment art is, emphatically, not bought to be hung on the wall. Instead, collectors are increasingly storing their assets in state-of-the-art warehouses. Christies are currently expanding their "Fine Art Storage Service" due to increased demand, and new ports are due to open in Singapore and Luxenbourg, adding to existing onces in Geneva. These large-scale warehouses offer highly regulated storage controls with humidity and light protection as well as extensive on-site security. They also have a notably appeal to the money-minded collector in that they allow the temporary postponement of VAT and customs duty payments.

The implications of this are vast. Not only with regards to the valuation of art, but with an entire overhaul of its purpose. Art bought as an asset and stored, indefinitely in a warehouse, far from the damaging light of day denotes a new mode of art ownership – one where the object d’art is reduced to a purely monetary transaction.

“It’s a depressing thought,” comments Connie Viney, a London-based artist who regularly exhibits at The Vyner Street Gallery, “Just recently there was the news that Sotheby’s have once again broken their auction record by selling a Rothko for £47.3m. By all accounts, it seems that that price will just increase once again next time it’s sold. With sums like that, how can people think of art becoming anything but a get-rich-quick scheme?”

Is this the real status of art in today's world? Elite, out-priced, stored out of site and endlessly circulated in a micro-economy closed off to all but the super-wealthy? "Art for art’s sake" is a 19th century concept. "Art for the people", too, is becoming swiftly outdated. The motto for our times, it seems, is "Art for the 1 per cent".

Auctioneers place bids during the Damien Hirst's Beautiful Inside My Head Forever, at Sotheby's in 2008. (Photo by Daniel Berehulak/Getty Images)

Kamila Kocialkowska is a freelance journalist based in London.

@ms_kamila_k

 

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Why is the Handmaid's Tale claimed as feminist, when it's deeply ambivalent about the movement?

The scapegoating of the anti-porn movement, Offred’s longing for hand cream - these feel like digs at second-wave feminists.

In a recent piece for the New York Times, Margaret Atwood tackled the question of whether or not her 1985 work The Handmaid’s Tale ought to be considered a feminist novel:

"If you mean an ideological tract in which all women are angels and/or so victimized they are incapable of moral choice, no. If you mean a novel in which women are human beings — with all the variety of character and behavior that implies — and are also interesting and important, and what happens to them is crucial to the theme, structure and plot of the book, then yes."

On the face of it, this seems a reasonable answer. It all depends on what one means by “feminist”. And yet, I can’t help thinking: if that’s the case, are those really our only two options?

Do we have to choose between a feminism which accords women no moral agency and one which merely tells that women are people, too? Certainly if it’s the latter, then Atwood is right that “many books are ‘feminist’”. The trouble is, I’m not sure such a definition gets us very far.

For instance, last week the cast of Hulu’s television adaptation of The Handmaid’s Tale caused controversy by appearing to suggest that the story was not feminist at all. In truth what was said did not deviate significantly from Atwood’s earlier comments. “It’s a human story,” claimed Elizabeth Moss, the actress who plays Offred, “because women’s rights are human rights.”

While it’s difficult to argue with that – unless one genuinely believes that women are not human – it’s a statement that grates, not least because it has an air of apology about it. What is really being emphasised here, and in Atwood’s earlier definition? The humanity of women, or the applicability of women’s stories to those humans who actually matter, that is, the men? 

It’s not always clear, which highlights a double-bind feminists often find ourselves in when discussing not just women’s art, but our politics, spaces and experiences. Regardless of whether or not we choose to universalise – “it’s just human experience!” – or to specify – “it’s a female-only issue!” –  there’s always a way for us to end up losing. We’re either erasing or essentialising; either we’re absorbed into the male default or accused of complicity in our own marginalisation.

The Handmaid’s Tale is a rich, brilliant novel, not least because there is no clear moral path one can negotiate through it. This is one of the reasons why I’ve found the impulse of some to treat it as a warning or call to action in the face of current threats to women’s rights both simplistic and inaccurate. The book contains an ambivalence towards women who might be described as feminists which often spills over into outright hostility or blame. This may be part of what is meant by treating women, feminists among them, as human beings, but we therefore need to take care in treating this as any kind of template for a politics of our own.

 “Yes,” writes Atwood in her New York Times piece, “[women] will gladly take positions of power over other women, even — and, possibly, especially — in systems in which women as a whole have scant power.” Yet there are no men in Gilead who rival Serena Joy, Aunt Lydia or even Janine in their grotesqueness. In contrast to them, the Commander seems almost endearing with his scrabble and his old magazines. Certain details – the scapegoating of the anti-porn movement, Offred’s longing for hand cream, the butter used as moisturiser – feel almost clumsy, deliberate digs at what Atwood has called “that initial phase of feminism when you weren’t supposed to wear frocks and lipstick”. It seems ironic to me, at a time when the loudest voices of protest against real-life surrogacy are those of radical, rather than liberal, feminists, that The Handmaid’s Tale’s own depiction of radicals as pro-natalist or extremist has not prompted a more nuanced reception of any purported message.

Yet this isn’t to discount the value of Atwood’s work to feminists exploring issues such as reproductive exploitation, faith and sexual agency. If one accords the novel the same respect one might accord a work that focuses on human experience which happens to be male, then it ceases to be a matter of whether one is able to say “look, women are people!” (of course we are) or “look, the baddies here are the same ones we’re facing now!” (they’re not, at least not quite). Hypothetical futures, in which gender relations are reimagined, expand our own understanding of our space in this world, as women in the here and now.

All too often, to count as human, women must consent to have their femaleness – that thing that makes them other – disregarded. The same is not true for men in relation to maleness. There’s no need to stress the universal applicability of men’s stories; it will already be assumed. By contrast, women are expected to file down all the rough edges in order to make their stories fit into a template created by and for men. It’s either that or remain on the outside looking in. Either women must have no individual narrative or we must have no specificity.

Where is the third option, the one where our own experiences get to reshape what being human actually means? Where our relationship with power is seen as something other than a diluted version of men’s?

I think it could be all around us, in the stories we tell. We just need to piece it together, in a space that is neither outside nor in, neither feminist nor apologetically neutral, but both female and human at once.  

Glosswitch is a feminist mother of three who works in publishing.

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