I recently read an article on Bloomberg provocatively titled “That $100,000 Painting Bought to Flip Is Now Worth About $20,000“. It talks about how an insane bubble in the contemporary art market that peaked in 2014 has now irretrievably burst, sending prices for the works of young, up-and-coming contemporary artists plummeting. According to the article, prices of many pieces have dropped by anywhere from 50% to 95% over the two year stretch since their price peak in 2014. The cynics among us might take this as proof that art is a terrible investment.
But I think that would be a poor conclusion. For one thing, most of the works profiled in the Bloomberg article are not what I would consider art. In my opinion, art must be beautiful. Unfortunately, most contemporary “art” lies somewhere between competent color study at best and ugly as sin at worst. So it shouldn’t be surprising that I avoid paintings (and large sculptures too, but that is another story) in my investment recommendations.
As an example, the Bloomberg article profiled a mixed media work by contemporary artist Lucy Dodd titled “Unwound Rope Wall Piece”. It stated that the piece was only estimated to bring between $10,000 and $15,000 at auction, a far cry from her previous auction record of $37,500. Unfortunately for Lucy Dodd, and anyone unlucky enough to buy her work, this piece of “art” looks like a very dirty window blind made out of dozens of loosely hanging strands of rope from an old mop. If you think something like that is art, then I am sorry, but AntiqueSage.com is not the website for you.
However, most of the works profiled in the Bloomberg article were paintings. While paintings can be wonderful works of art, I am not particularly enthused about them as investments for a few reasons. First, paintings are the most widely recognized form of art. Ask the average person what art is and 9 times out of 10 the answer will be paintings. A side effect of this prominence in the public imagination is that paintings have been scoured relentlessly by professionals looking to invest in contemporary art. Hence, there are few bargains to be found.
Second, the world of contemporary art – most of it paintings – is, more or less, a cesspool of insufferable, pseudo-intellectual junk. Most contemporary artists don’t actually create works in hopes of producing beautiful, alluring pieces. Instead, they have fetishized contemporary art into a morass of inaccessible, unapproachable and sometimes bizarre representational ideas. If that doesn’t make any sense to you, then welcome to the club. Most contemporary art strives to be performance art applied to a canvas. And no, that isn’t a compliment.
And the people who actually invest in high-priced contemporary art are often no better than the artists who have created it. These contemporary art consumers are usually just trying to impress their acquaintances at the local country club. They don’t see the works as aesthetically pleasing or even really understand them. Instead, they are just tools to project social status and power. By this measure, the more money you spend on a contemporary painting and the fewer people who understand it, the better.
Lastly, the Antique Sage’s five rules of investing in art can be much more easily be applied to mediums other than paintings. The investment desirability of any work of art is determined by five general attributes: size/portability, quality of materials and construction, durability, scarcity and stylistic zeitgeist. But these qualities are far more easily defined and measured in the minor arts: jewelry, coins, miniature sculpture and objets d’art, among others.
In other words, while I can tell you how desirable many antiques and other minor arts are, I can render no valid, objective opinion on the investment merits of paintings – particularly contemporary paintings. But, I do know that if you set a typical, non-representational, contemporary painting in front of 100 people, only 2 or 3 will find it to be attractive. And, if anything, I’m being a little too kind with that assessment. In reality, probably something closer to 1 in 100 people finds contemporary paintings to be visually appealing. That doesn’t sound like an asset with great investment potential to me.
So I’m not surprised that a bunch of self-important, avant-garde speculators lost a lot of money gambling in contemporary art. And I also don’t have much sympathy for them. As they say, those who sow the wind, reap the whirlwind – even in the art world.
Instead, this Bloomberg article underscores that real investment grade art – alluring ancient Greek coins, stunning Art Deco diamond jewelry and exquisite Japanese Edo era samurai tsuba, among others – is still a great investment. This underrated asset class is not only remarkably accessible to the average person, with prices generally starting at only a couple hundred dollars, but has also suffered no significant price declines. It simply isn’t subject to the whims of a few rich corporate executives or trust fund elites who enjoy dappling in the contemporary “art” market.
