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Financial Advisers: Exercise Caution About Investing in Art

By    |   Tuesday, 18 Mar 2014 01:13 PM

The eye-popping sales of major artworks over the last year, such as the $142 million deal for a Francis Bacon triptych, may make you eager to invest in art, but beware of the dangers, financial advisers tell The Wall Street Journal.

Strength in one part of the art market doesn't necessarily translate to others. Artists and styles quickly gain and lose popularity.

Last year, while the Standard & Poor's 500 Index jumped 29.6 percent, the Mei Moses All Art World Index, which measures repeat sales of artworks at auctions, gained only 1.5 percent.

Editor’s Note: 18.79% Annual Returns . . . for Life?

And you can't just sell your art with the push of a few buttons on a computer keyboard like you can with your stocks. Selling a work of art can take extensive negotiations.

"Since it can take years to sell a piece, art should be considered as a highly illiquid market," Ron Vinder, a financial adviser at UBS, told The Journal.

You also may have to pay higher taxes on capital gains for your art than for your stocks.
"Flipping art is a very difficult investment strategy," Tom Hainlin of Ascent Private Capital Management, told The Journal.

If you do decide to invest in art, first seek something you will enjoy on your wall, because that's where it may stay, art experts tell Newsmax magazine. Then look for investment value.

"You buy something because you love it, and after you love it, you learn what makes quality," Frank Robinson, former director of Cornell University’s Johnson Art Museum, told Newsmax.

Editor’s Note: 18.79% Annual Returns . . . for Life?

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The eye-popping sales of major artworks over the last year, such as the $142 million deal for a Francis Bacon triptych, may make you eager to invest in art, but beware of the dangers, financial advisers tell The Wall Street Journal.
artwork,investing,paintings,market
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2014-13-18
Tuesday, 18 Mar 2014 01:13 PM
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