Art as an Asset for Wealth Management

Jean-Francois Verdie; Miloud Guermatha

doi:doi:10.11648/j.ajtab.20210701.11

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Art as an Asset for Wealth Management

Jean-Francois Verdie, Miloud Guermatha

Published in American Journal of Theoretical and Applied Business (Volume 7, Issue 1)

Received: 5 January 2021 Accepted: 18 January 2021 Published: 25 January 2021

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Abstract

Throughout time, artwork has been a luxury commodity associated with aesthetic appeal, affluence and power. While the primary benefactors of art industry have always been the artists themselves and intermediaries that link them to buyers, the art industry is now emerging as a financial investment plan especially among the affluent members of the community who are in position to invest into pleasure assets. This because art generally appreciates with value at a steady rate which is lucrative and the industry has expanded with time as more key players join in to optimize on the gains. While it is a legitimate investment venture, the art industry is characterized by volatility, illiquidity and opacity which discourage many investors. In addition, the risk taken rarely measures up to the reward gained. This is considering the high initial cost of investing and the time it takes for the artwork to gain considerable value for adequate profit to be gained. This leaves the art investment to a select few especially the affluent that looking to diversify their investment portfolio especially for long term investments. This article weighs the rewards of investing in artwork as an asset against the risks involved and justifies whether investment in art should be an investment option.

Published in	American Journal of Theoretical and Applied Business (Volume 7, Issue 1)
DOI	10.11648/j.ajtab.20210701.11
Page(s)	1-7
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Art, Investment, Risk and Return, Wealth Management

References

[1]	Angelini, F., & Castellani, M. (2018). Understanding the artwork pricing: some theoretical models (No. 17-25).
[2]	Chang, S. (2013). Art as an investment: return, risk and portfolio diversification in Chinese contemporary art investment.
[3]	Coslor, E., & Spaenjers, C. (2013). Organizational and Epistemic Change: The Growth of the Art Investment Industry.
[4]	Fischer, C., & Arnold, J. (2012). Insurance and the Art Market. Fine Art and High Finance: Expert Advice on the Economics of Ownership, 197-210.
[5]	Frye, B. L. (2018). New Art for the People: Art Funds & Financial Technology. Chi.-Kent L. Rev., 93, 113.
[6]	Gerlis, M. M. (2014). Art as an Investment? A Survey of Comparative Assets. Ashgate Publishing, Ltd.
[7]	Goetzmann, W. M, Spaenjers Renneboog L. and Spaenjers Christophe, Art and Money, Yale ICF working paper, No 09/26, Yale University, United State.
[8]	Gordon, R., Hermens, E., & Lennard, F. (2014). Authenticity and Replication: The ‘Real Thing’in Art and Art Conservation. Archetype Publications.
[9]	Preziosi, D. (Ed.). (2009). The art of art history: a critical anthology. Oxford University Press, USA.
[10]	Rachel A. J. Pownall (2020), Art as financial investment, Tillburg University, Department of Finance, working paper.
[11]	Rachel A. J. Pownall and Christian Wiehenkamp. Art backed lending: implied spreads and Art Risk Management, 2020, Tilburg University - Department of Finance; Maastricht University - Department of Finance, working paper.
[12]	Ramsay, B. A., & Jacobs, J. K. (2012). Art Conservation and Restoration. Fine Art and High Finance: Expert Advice on the Economics of Ownership, 263-286.
[13]	Renneboog, L., & Spaenjers, C. (2013). Buying beauty: On prices and returns in the art market. Management Science, 59 (1), 36-53.
[14]	Reutter, M. A. (2001). Artists, Galleries and the Market: Historical Economic and Legal Aspects of Artist-Dealer Relationships. Vill. Sports & Ent. LJ, 8, 99.
[15]	Stavnichaya, A. (2011). Art Investment Portfolios. Arcad Business School, Helsinki, Finland.
[16]	Xiang, A. (2017). Unlocking the potential of art investment vehicles. Yale LJ, 127, 1698.

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Jean-Francois Verdie, Miloud Guermatha. (2021). Art as an Asset for Wealth Management. American Journal of Theoretical and Applied Business, 7(1), 1-7. https://doi.org/10.11648/j.ajtab.20210701.11

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ACS Style

Jean-Francois Verdie; Miloud Guermatha. Art as an Asset for Wealth Management. Am. J. Theor. Appl. Bus. 2021, 7(1), 1-7. doi: 10.11648/j.ajtab.20210701.11

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AMA Style

Jean-Francois Verdie, Miloud Guermatha. Art as an Asset for Wealth Management. Am J Theor Appl Bus. 2021;7(1):1-7. doi: 10.11648/j.ajtab.20210701.11

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@article{10.11648/j.ajtab.20210701.11,
  author = {Jean-Francois Verdie and Miloud Guermatha},
  title = {Art as an Asset for Wealth Management},
  journal = {American Journal of Theoretical and Applied Business},
  volume = {7},
  number = {1},
  pages = {1-7},
  doi = {10.11648/j.ajtab.20210701.11},
  url = {https://doi.org/10.11648/j.ajtab.20210701.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20210701.11},
  abstract = {Throughout time, artwork has been a luxury commodity associated with aesthetic appeal, affluence and power. While the primary benefactors of art industry have always been the artists themselves and intermediaries that link them to buyers, the art industry is now emerging as a financial investment plan especially among the affluent members of the community who are in position to invest into pleasure assets. This because art generally appreciates with value at a steady rate which is lucrative and the industry has expanded with time as more key players join in to optimize on the gains. While it is a legitimate investment venture, the art industry is characterized by volatility, illiquidity and opacity which discourage many investors. In addition, the risk taken rarely measures up to the reward gained. This is considering the high initial cost of investing and the time it takes for the artwork to gain considerable value for adequate profit to be gained. This leaves the art investment to a select few especially the affluent that looking to diversify their investment portfolio especially for long term investments. This article weighs the rewards of investing in artwork as an asset against the risks involved and justifies whether investment in art should be an investment option.},
 year = {2021}
}

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TY  - JOUR
T1  - Art as an Asset for Wealth Management
AU  - Jean-Francois Verdie
AU  - Miloud Guermatha
Y1  - 2021/01/25
PY  - 2021
N1  - https://doi.org/10.11648/j.ajtab.20210701.11
DO  - 10.11648/j.ajtab.20210701.11
T2  - American Journal of Theoretical and Applied Business
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JO  - American Journal of Theoretical and Applied Business
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AB  - Throughout time, artwork has been a luxury commodity associated with aesthetic appeal, affluence and power. While the primary benefactors of art industry have always been the artists themselves and intermediaries that link them to buyers, the art industry is now emerging as a financial investment plan especially among the affluent members of the community who are in position to invest into pleasure assets. This because art generally appreciates with value at a steady rate which is lucrative and the industry has expanded with time as more key players join in to optimize on the gains. While it is a legitimate investment venture, the art industry is characterized by volatility, illiquidity and opacity which discourage many investors. In addition, the risk taken rarely measures up to the reward gained. This is considering the high initial cost of investing and the time it takes for the artwork to gain considerable value for adequate profit to be gained. This leaves the art investment to a select few especially the affluent that looking to diversify their investment portfolio especially for long term investments. This article weighs the rewards of investing in artwork as an asset against the risks involved and justifies whether investment in art should be an investment option.
VL  - 7
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Author Information

Jean-Francois Verdie

Economics and Finance Department, TBS Business School, Toulouse, France
Miloud Guermatha

Economics and Finance Department, TBS Business School, Toulouse, France

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APA Style

Jean-Francois Verdie, Miloud Guermatha. (2021). Art as an Asset for Wealth Management. American Journal of Theoretical and Applied Business, 7(1), 1-7. https://doi.org/10.11648/j.ajtab.20210701.11

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ACS Style

Jean-Francois Verdie; Miloud Guermatha. Art as an Asset for Wealth Management. Am. J. Theor. Appl. Bus. 2021, 7(1), 1-7. doi: 10.11648/j.ajtab.20210701.11

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AMA Style

Jean-Francois Verdie, Miloud Guermatha. Art as an Asset for Wealth Management. Am J Theor Appl Bus. 2021;7(1):1-7. doi: 10.11648/j.ajtab.20210701.11

Copy | Download

@article{10.11648/j.ajtab.20210701.11,
  author = {Jean-Francois Verdie and Miloud Guermatha},
  title = {Art as an Asset for Wealth Management},
  journal = {American Journal of Theoretical and Applied Business},
  volume = {7},
  number = {1},
  pages = {1-7},
  doi = {10.11648/j.ajtab.20210701.11},
  url = {https://doi.org/10.11648/j.ajtab.20210701.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20210701.11},
  abstract = {Throughout time, artwork has been a luxury commodity associated with aesthetic appeal, affluence and power. While the primary benefactors of art industry have always been the artists themselves and intermediaries that link them to buyers, the art industry is now emerging as a financial investment plan especially among the affluent members of the community who are in position to invest into pleasure assets. This because art generally appreciates with value at a steady rate which is lucrative and the industry has expanded with time as more key players join in to optimize on the gains. While it is a legitimate investment venture, the art industry is characterized by volatility, illiquidity and opacity which discourage many investors. In addition, the risk taken rarely measures up to the reward gained. This is considering the high initial cost of investing and the time it takes for the artwork to gain considerable value for adequate profit to be gained. This leaves the art investment to a select few especially the affluent that looking to diversify their investment portfolio especially for long term investments. This article weighs the rewards of investing in artwork as an asset against the risks involved and justifies whether investment in art should be an investment option.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Art as an Asset for Wealth Management
AU  - Jean-Francois Verdie
AU  - Miloud Guermatha
Y1  - 2021/01/25
PY  - 2021
N1  - https://doi.org/10.11648/j.ajtab.20210701.11
DO  - 10.11648/j.ajtab.20210701.11
T2  - American Journal of Theoretical and Applied Business
JF  - American Journal of Theoretical and Applied Business
JO  - American Journal of Theoretical and Applied Business
SP  - 1
EP  - 7
PB  - Science Publishing Group
SN  - 2469-7842
UR  - https://doi.org/10.11648/j.ajtab.20210701.11
AB  - Throughout time, artwork has been a luxury commodity associated with aesthetic appeal, affluence and power. While the primary benefactors of art industry have always been the artists themselves and intermediaries that link them to buyers, the art industry is now emerging as a financial investment plan especially among the affluent members of the community who are in position to invest into pleasure assets. This because art generally appreciates with value at a steady rate which is lucrative and the industry has expanded with time as more key players join in to optimize on the gains. While it is a legitimate investment venture, the art industry is characterized by volatility, illiquidity and opacity which discourage many investors. In addition, the risk taken rarely measures up to the reward gained. This is considering the high initial cost of investing and the time it takes for the artwork to gain considerable value for adequate profit to be gained. This leaves the art investment to a select few especially the affluent that looking to diversify their investment portfolio especially for long term investments. This article weighs the rewards of investing in artwork as an asset against the risks involved and justifies whether investment in art should be an investment option.
VL  - 7
IS  - 1
ER  -

Copy | Download