Buying art during the period of inflation?

Comprar arte durante o período de inflação?

The Art Market
At the moment,start your art collectionIt's easier than ever, thanks to the internet. Now the purchase of works ofartit's not just for art experts or wealthy collectors who can hire them, as all the necessary information is already online! Many works of art can be bought or bid for online, bypassing older models such as dealing directly with galleries or participating in auctions. In 2019, Hiscox's annual art trade report captured the trend, estimating that online art sales hit $4.8 billion that year — up from $1.5 2013. The number is estimated to rise to US$9.32 billion by 2024.

The coronavirus pandemic has also spurred significant change — in big businessauctions like Christie's and Sotheby'sthere were hybrid live and digital sales, and galleries and art fairs had to adapt to virtual showrooms. There was also the rise of the digital art market mainly thanks to theNFTs (non-fungible tokens). However, we currently live in uncertainty around the Ukraine crisis that poses a threat to Europe and the US. what theart marketcan wait as inflation rises? Is inflation positive or negative for the art market?

Buying art during the period of inflation?
Looking at historical auction house data by the Mei Moses Fine Art Index since 1950, the prices of art pieces followed a positive trend, beating inflation rates. Thus, art has been considered a "store" of value, as it offers protection against the reduction in purchasing power brought about by inflation. Following this logic and empirical evidence, investors choose theartas an investment in periods of high inflation. However, it is important to note that even if trends for the broader art market would suggest this, performance and volatility vary substantially across shorter time periods and art sectors.In addition to the macroeconomic scenario, assessing the impact of inflation and rising interest rates on theart marketit also requires the relative comparison of art with other assets. Opportunity cost, as mentioned when presenting the choice between saving or spending, also applies to the different alternatives that exist within each of these categories.

In recent years, thearthas increasingly been treated as an alternative investment asset, as it has been proven, both by repeat sales and by hedonic regression models, that art market returns are largely uncorrelated with stock market returns. . A JP Morgan analysis showed that the S&P 500 and the 10-year Treasury moved together below a 3.5% rate from 2009, inferring that rising rates could be good for the stock market in general. .
THECurrently there is an increase in the market, both in the traditional and online market and this climate is driving collectors to buy something. With this phenomenon, theNFTs, which brought crypto enthusiasts to the art world. However, the feverNFTsand widespread inflation represent two completely different markets. YouNFTsthey are born out of the need to diversify your portfolio, in the same way that people see art as a hedge against their other more traditional investments. So, despite having aboomin traditional art andNFTs, you don't necessarily see peoplewho buyNFTsto buy traditional or institutional works, and vice versa.

In terms ofinvestment, diversifying your portfolio is one of the most beneficial things anyone can do to generate income from long-term investments. There are many paths you can take to optimize your investments and, in recent years, art has been recognized as a solid strategy. There are two camps when it comes to art collection: buying for pleasure or buying for investment. But don't worry, there is a viable way to combine these mindsets to achieve a balance that satisfies both agendas. In every period of human history, art has easily overcome inflation, has long been considered an investment of passion, and offers potential economic benefits.

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