What Dictates the Value of Art?

From a Pastime to Profession: Alistair Cooper, Private Wealth Advisor LC Group
By: London C Group
 
 
LCG Fine Art Fund
LCG Fine Art Fund
 
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LONDON - March 2, 2016 - PRLog -- Ever since I was a teenager I have held a passion for Art, being nurtured by a family member who worked in the fine art industry. After I attended university and joined the financial industry my passion became an obsession and led to my involvement with Art as an alternative investment, most recently founding LC Group’s Art Investment Divison

When you breakdown the figures the fact is that the vast majority of artwork that is sold today will have no meaningful value in one hundred year and predictably the top of the market will move radically. The fact is that fashion has long driven price, towards the end of the 19th Century record sales for Meissonier 1815-1891 and Bourgereau, who passed away in 1905, far surpassed all other contemporary artists including a young Pablo Picasso, Klimt and Cezanne amongst numerous others.

Art has been regarded as an alternative investment for a longtime; ever since auctions started in England and the Netherlands during the 17th Century, and unfortunately not a very good one. The costs of transactions are high and insurance is expensive. The vast majority of art weakens in value as the artist becomes overlooked, unnoticed and ultimately forgotten. Artists that were once popular are regularly reduced to genre with dusty auction houses overflowing with their work. I mean how many artists have studied, worked and exhibited during the 19th and 20th Centuries? Tens of millions, however only a small number are remembered.

So what influences the value of any art work? The artist? The standing of the artist within their peers? The condition of the work of art? Provenance? What is the artist/ pieces place in history, i.e. what impact did it have on subsequent generations of artist that succeeded them?

Here, now, today art is dealt with as a commodity with hundreds of millions of dollars being invested annually in artists that are in favor today. A parallel can be drawn between art and the stock market referring to new “New Issues”. At the end of the day, not dissimilar to “Large Cap” stocks, art must show lasting value. Like any investment, demand must beat supply for the price to continue to go up. The value of artist’s work increases as their work is eaten up by museums, gaining exposure to the wider public and ultimately never returned back to open market. When push comes to shove the price of any given artists work is driven by the test of time, and unless you possess a time machine history cannot be fast-tracked.

During 1929 who would have thought that one of Edvard Munchs works would have sold for a fraction of the price of a well-known Anders Zorn to see the ratio reversed someday? The fact remains that Zorn is by no means a forgotten artist, with a world record of north of $3 million was recently bid for an oil on canvas, while an iconic Munch has achieved more than $100 million and they are both fellow countrymen. On the one hand Munch is regarded for his impact on expressionism and its followers for well over a century, while Zorn is well-regarded as a master technician.

Art be it fine or not, evokes feeling and invokes thought, it has the proven ability to enhance lives. Art is a fantastic investment for collectors that can ignore fleeting market value while their respective lives are improved by its mere presence. As for those that want to speculate, without the guidance of an industry professional, caveat emptor (Let the buyer beware).

If you have any questions regarding this article or would simply like to establish how the L C Group can help you, your family and/or business secure a brighter financial future then simply get in touch and arrange an appointment to speak to one of our advisors.

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L C Group, Marcus Hansen
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