Where does from art derive its value as an asset?

It is not surprising then that the idea of ‘hard and tangible assets’ is gaining ground and popularity amidst today’s economic uncertainty. In this context, art expert Adam Lindemann explains, “Art may not be very hard, but it is tangible, at least; there is an international market (and demand) for it both privately and at auction. If inflation rears its ugly head, people believe that prices of art will inflate along with real estate and most other hard (or tangible) assets.”

According to him, this will also drive prices of vintage automobiles, great furniture pieces, ceramics, antiquities, and most other exceptional collectible, which draw the attention the über-rich internationally. They will be more than willing to acquire such ‘arty’ assets.

The expert cites gold as the best example of increasing value in a depressed economic environment. It is now at an all-time high, having surged to $1,350 from $550 an ounce, a couple of years. Though it carries no intrinsic value other than the one defined by its constant demand in the jewelry industry, it remains the safest thing to put your cash into. “That's exactly how I like to feel about art.”

And where does the value come into play, he feels? Firstly, the acquisitive nature of the collector is something simple economic analysis is not able to account for. Artworks soar above the estimated prices for either they are underpriced, or for speculation that helps them to attain a high price.

Some rare works have been impossible to acquire for decades, and witness ‘pent-up demand’ from genuine collectors waiting eagerly for a shot. But he also sounds a note of caution. The broad health of the art market is still somewhat fictional, he cautions. But art will continue to gain strength as an alternate asset class over time...