It’s no secret that money market investors are in the business of chasing the best possible returns. What we think of as traditional assets, that’s to say stocks and bonds, have performed poorly in recent years amid ongoing market volatility; 2018 saw significant swings and was one of the most turbulent years on record.
Meanwhile, the art market grew 12% in 2017 to an estimated $63.7bn with the USA holding the number one position, according to a report published in March 2018 by Art Basel and UBS. This growth continued through 2018, increasing c.10.6% as at November, outperforming stocks and bonds and coming in ahead of other luxury assets including fine wine and classic cars. The chart reproduced above was published in the Wall Street Journal in December 2018, a sure sign that investors are taking notice.
As they seek to enhance returns in tough markets, investors find themselves increasingly looking towards luxury alternative assets for their returns potential and as a means of diversifying their risk. So-called ‘real assets’ tend to be uncorrelated to large market swings and provide something more tangible for an investor; gold was the traditional preserve of the real asset however it too has struggled. At this point, art is becoming a more compelling proposition for many.
You can download and read the full Art Market Report here.