Art Investors - Why Art Sales Go To The Already Rich

Ah Raymond Nasher, the standard big time art investor (passed away a couple years ago). This picture is the classic art investor... looking away from the work.

With art being a stable market for decades, investors are beginning to dip their toes into the waters of the art world right along side the stock market. Much like stocks, artists are the symbols to watch.

Investors scope out the next big thing and buy in bulk or become a patron and have full control over the artists decisions.

They then go on to sell the works on Artnet or some auction house years down the road and sometimes make a killing.

Art investors are good and bad for the art world.. wait make that good. Many art dealers think they're bad because they swoop in and buy meaningless canvases so they can resell them down the road. Most in the industry think they're great because they push ones art career and push the artists financial freedoms in the pursuit of new art. Of course the sale of each work goes way down when investors buy in bulk but it would allow an artist to have a proper studio and perhaps an assistant. It's a simple case of buy early for low, sell later for high. For the art investor, the potential reward in this market is much higher than the stock market, but it is also much more volatile.

The scary part is that this part of economics is unregulated (for good reason), so let's say you are a hedge fund manager and you want to get involved with art. You could go to Christies and bid on multi-million dollar impressionist paintings. Or.. you could locate 20 artists, buy 50 pieces from each and store them.

Then, start to tell all your wealthy buddies about some of the artists. Make more sales for the artists and then eventually a few of your investments will break through (Think the Robert Scull auctions in the 70's).

It's insider trading at its finest.

For all those artists out there that want investors, don't hold your breathe. These are savvy businessmen and even though I am being a bit cynical, they will tear you to pieces.

The art market would be better without the artists wouldn't it? Art is like gold or silver, it is a valuable market for priceless pieces of beauty and unlike a stock, it is a tangible asset.