Wise to Art

Lots and lots is being said and speculated on the outcome of the present turmoil and although the experts are generally pessimistic, there are in the moody choir some tenors of hope.

Let’s once again remember what we were taught about the market being cyclic and that sense is only made on the longer term. There is absolutely no way to predict what will happen in the months to come and those depending on the art market for their living will have to use all their cunning to survive in a climate where price volatility and uncertainty rule.

Remember, the burst of the latest bubble was essentially about contemporary art and about living artists, having never before attained such monetary results. It was also about people knowing very little about art being lured into buying products of smart marketing. The array of new galleries that followed suit, the shoals of private dealers riding the currant, are now quickly dwindling away; also because of the impertinent habit of a new breed of artists to dispense of their services.

In times of uncertainty people turn to traditional values. It’s normal and healthy. Classicism will keep on being the rock on which to lean, and classicism takes us today already well into the mid-20th century. Let’s say that there are two generations needed to establish a work’s stature. Contemporary creation may be more interesting, rewarding, fun or whatever, but in terms of value it can’t be but ephemeral or conjectural. The art market investor, who is not a speculator, knows where to put his savings.

And this is the final line. Investing in art is in normal circumstances not more, nor less rewarding than investing in stocks, bonds or commodities. It is part of a healthy approach to diversification and as such helps to attenuate risk. And of course it’s much nicer to spend your time enjoying your art than following indices… Speculation, on the other hand, is common to all monetary instruments, with inevitable rises and falls in fortune.

It’s clear that the financial depression eclipsed the contemporary art boom and that the latter’s demise is affecting the art market in general. But if the disease is endemic to the affected patient, the collateral contagion is but temporary. Old masters, impressionists, modern masters etc. will quickly go clear.

So for 2009, this is my bet: vested values will suffer little, contemporary creation will be shunned. This till the end of the cycle…