Art is giving bricks, mortar and ingots a run for their money

By Giuliano Papalini

Despite the dominance of gold and property, which are considered by so many Italians as a safe bet for prosperity and security, the art market has been taking up a lot more space in the diverse world of investments. This is a place of real profit, considering the volatility of financial products, which are mainly an outcome of the economic crisis and the uncertainties of the current political system. Entry into a field of technological innovation has broadened its horizons further, paving the way for new collectors and new forms of investment. The internet is becoming an inexhaustible source of guidance (not always impartial), analysis (not always authoritative, yet often banal and improvised), offers (too many and too tempting), and tools of all kinds through which to access this market in a decisive manner of expansion, and with immense potential. There are those who build platforms from which to offer works which can be divided into shares, who introduce blockchains, those who build predictive models on future auction price trends through artificial intelligence, and those who even try to secure works as underlying issues of bonds.

The art market trend

In order to not come across as yet another of the numerous advisors – of which we are certainly not lacking – we are attempting an analysis starting from concrete data obtained from both reliable and verifiable sources. And so, by comparing trends of the most popular artists with other existing concrete sources such as real estate and gold prices, we can see that an interesting reality emerges both on the Italian and international art market scenes. And so, comparing the trend of prices of the most popular artists with other real assets, such as real estate indices and gold prices, we see that an interesting reality emerges: both on the Italian and the international scene, the art market – particularly that connected to high quality works – outdoes bricks and mortar in value, and puts itself on par with that of gold (especially given its shelter from the strong oscillations of the ingot). Furthermore, according to the performance achieved by the most successful modern and contemporary masters (both Italian and international) over the last 20 years, investing in art is certainly more profitable. Analyzing the performance indices provided by Artprice, the most complete and updated database of the world auction market, it shows what 100 dollars invested in 2000 on the following artists, are currently worth: Carla Accardi: $551 (+ 451%); Agostino Bonalumi: $739 (+ 639%); Fernando Botero: $ 200 (+ 100%); Alberto Burri: $419 (+ 319%); Enrico Castellani: $830 (+ 730%); Christo: $172 (+ 72%); Giorgio Griffa: $852 (+ 752%); Giorgio Morandi: $221 (+ 121%); Luigi Ontani: $328 (+ 228%); Pino Pinelli: $1209 (1109%); Jannis Kounellis: $173 (+ 73%); Julian Schnabel: $222 (+ 122%); Giuseppe Uncini: $310 (+ 210%); Andy Warhol: $219 (119%); Gilberto Zorio: $162 (+ 62%). These are some examples that testify to the unstoppable rise of the art market which has lasted for over twenty years, and which in 2019 achieved a turnover of over 70 billion dollars. This growth is even more evident in the contemporary sector which – according to the Art Price Report 2019 – in 19 years has recorded a global increase of 1800%, going from 103 million in 2000 to almost 2 billion dollars in 2019.

Houses and gold

At the same time – according to analysts of the Tecnocasa Group Studies Office – in the last twenty years the real estate market has seen a 30.5% increase in prices and a 3.6% growth in sales. All in all, this isn’t a bad performance – particularly if we take into account the severe economic crisis which has continued throughout the last decade. As for the trend in the price of gold, if we analyze the timeline of gold (source Gold Future), we can see that 100 dollars invested in 1999, was worth 523.79 dollars as of October 2019, an increase of nearly 500%. However, keep in mind that there have been numerous fluctuations with drastic downturns, mainly linked to international instability associated with current affairs. This is a factor which must be taken into account in the evaluation of an investment, particularly when considered a secure asset or safe bet by investors and bank account holders.

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