Why art is considered a safe asset by international investors?

The art market sure is rolling along with plenty of positive momentum, even as the rest of the financial world feels rather shaky and soft, trembling at any minor shock. Though he cannot totally explain and grasp this phenomenon, as he himself confesses, writer-columnist Adam Lindemann sees plausible reasons for this – some of them economic and some pertaining specifically to the art world.

As he rightly notes in an elaborate essay (The New York Observer), we are presently in an exceptionally low-interest-rate scenario, and sees no reason for things to dramatically change in the near future. So if you purchase government bonds, there is hardly any yield.

The same holds true if you decide to put money in your savings account. Again there is no guarantee of returns in the stock market if you put your hard earned money there. It has been a rather sickening roller coaster for most investors across the world – making it difficult to bet on the upward or downward swings.

Art perhaps has no use, but it has real value, at least in the minds of many who love it,” emphasizes Mr. Lindemann. In a scenario where not everything on offer will sell, the major auction houses have been prudent enough to groom their catalogs for keeping the ‘buy-in’ rates low, and also lowering the consigners’ estimates and the expectations.

The reflection of the rebound is mirrored in Sotheby's stock that has managed to rally all the way up to a high of $47 from a 52-week low of $19. The strong auction sales seem to suggest that while the art market is not back to late-2007 peak levels, it is also not that far off!

The art analyst sums up to state: “The auction experts and the dealers kept telling us that great art is rare and valuable, a good avenue to store wealth for self-satisfaction and also as a worthy investment. On the face of it, and in light of a stuttering economy, these views looked self-serving. But they proved to be correct, ultimately.”