Tracing art market peaks and falls

As savvy investors began to notice the lucrative pot of gold at the end of the shining rainbow, the eclectic art appreciating community fast expanded to incorporate well-heeled spenders who eyed quick returns. Opportunists also decided to help those with shallow pockets by floating art funds - if you could not own a whole Souza canvas, you could perhaps lay claim to a corner of it.

Then Lehman Brothers collapsed in September 2008. And the ripples hit the stable and serene art market, knocking out its steady bottom as well. The aftereffect was particularly severe in India. Contemporary and young artists, all a hot property till that point, suddenly found no takers. Several art funds bombed and many investors suffered.

Some market expert term the turn of events leading to downturn serendipity. Richa Karpe, director at Altamount Capital, a firm that specializes in advising rich families on investments, says that 2008 was good because it brought a sense of reality. "Every artist cannot be a collector's item 50 years from now," says Karpe. She says she gets scared when a family asks her to take them around and make them buy art. "It is dangerous territory to get into, as the objective is 'how much money will I make?'."

A recent Forbes India article by writer Dinesh Narayanan, racking the tumultuous turn of events, also notes the fact that the market has stabilized quite a bit since those testing days. In fact, 2011 has proved to be better year for artists.

The essayist notes that recovery during the trying phase did come at a certain cost especially to the contemporaries, having been made to settle for comparatively lower prices. The article quotes the Art Ventures director Arvind Vijaymohan as saying that the market segment, which largely remained unruffled, was that of the modernists…