Put Your Money Where The Art Is

Growing Number and Influence Of Asian Auctions Will Provide Excellent Buying Opportunities For Diversifying Investors And Avid Collectors Alike

Up for auction in Hong Kong, May 24, Liu Ye, Boogie Woogie, Little Girl in New York (2006)

Up for auction in Hong Kong, May 24, Liu Ye, Boogie Woogie, Little Girl in New York (2006)

We have written several times that right now is the best time to purchase both top historical artists and emerging talent. Now that auction season is getting ready to really start heating up, journalists around the world are noticing that there are great deals to be had, and that anyone who is interested in jumping into art as an investment should do so now, when the market is more affordable. Upcoming auctions in Hong Kong and elsewhere are sure to reflect the trends we’ve been noticing — China and emerging contemporary art markets are going to continue to be the best place to put your money. Here’s why:

1. China is recovering: China’s massive economic stimulus package has already given its economy a shot in the arm. As the Times UK reportsGoogle

Traders in Shanghai and Hong Kong have taken yesterday’s manufacturing data as a clear sign of recovery for the world’s third-biggest economy. New jobs have been created, output has returned to positive territory and factories across a broad range of sectors received new orders in April. This is in sharp contrast to the scene late last year, when tens of thousands of factories closed and 20 million migrant workers were laid off.

The revival in manufacturing was signalled by a striking bounce in the Asia-based brokerage CLSA’s Purchasing Managers’ Index for April — a closely watched monthly report viewed by many investors as a more reliable snapshot of the industrial status quo in China than the official figures produced by Beijing.

With economic figures rapidly headed upward, the China market will continue to get even warmer. As it does so, its art market, which has mirrored its stock market over the last several years, should by all indications continue to do so. As the stock market continues trending upward, Chinese investors will have more money. And when they have more money, they invest. And what do the Chinese tend to invest in? That brings us to the next point:

2. Chinese investors like portable, hard assets: If there is one thing that is a sure bet in terms of wealthy Chinese, it is that they like hedges, and they like to save for a rainy day. Additionally, they love diversification. That is part of the reason Sotheby’s recent auction of fine wines, historical watches, and jewelry did so well — Chinese buyers like to purchase assets that will hold and grow value sustainably. So if you want to put your money in asset classes that will be less susceptible to massive value fluctuations, buy what the Chinese buy. So what are they buying? They’re buying gold, contemporary artwork, antiques, luxury autos, and jewels. What do these assets share in common? They’re portable, and they’re tangible.

So what’s the connection to art? Simple — big Asian auctions are coming in the next few months. Christie’s upcoming sale of 20th century modern and contemporary Asian and Chinese art auctions in Hong Kong, set to take place on May 24-25, are expected to attract large numbers of mainland collectors and investors. So it is best to keep an eye on these sales, since China’s economy’s getting back on track, and the wealthy are increasingly purchasing domestic art out of pride and the solidity of their value. As the Art Market blog pointed out today, art auctions are going to be the scene of stiff competition between new Asian buyers and traditional western collectors. In April of this year, the trend was set:

The results of the Russian and Asian art sales are particularly pleasing and have been successful enough to suggest that the market for Russian and Asian works is as strong as it has ever been albeit slightly more discriminating. Asian buyers were the dominant force in all the Asian art sales with works from all period and all periods of Asia attracting plenty of interest.

So, as Chinese buyers snatch up more domestic artwork, historical artists and pieces become more scarce, hence they appreciate. And if you get in when the getting is good, you’ll be on top later on.

3. It is, very simply, the best time to buy art: Southeast Asian art collectors are jumping on the opportunity to buy pieces from top Chinese artists. As the Phillipine Inquirer writes,

Forget the bank. Don’t even think of parking your money on volatile stocks. If you have extra cash and are looking for more secure ways to diversify your investment portfolio, now is the best time to go shopping for art pieces.

Apart from being more stable than most traditional forms of investments, works of art are capable of educating and providing you endless hours of pleasure not even a posh villa or vintage sports car can probably match.

But not just any artwork will do. Despite their hefty price tag, it pays to invest in pieces done by renowned artists, either National Artists or those considered “masters.”

Collectors in the Phillipines, who are a good barometer for trends in the region, note that Chinese art, even for collectors who are not particularly avid collectors of the country’s art, is a great investment. As one major Phillipine collector quoted in the Inquirer article noted:

“Chinese art isn’t something I would collect. It doesn’t excite me the way Southeast Asian art does,” he says. “But that didn’t stop me from buying Chinese art as a form of investment. You simply can’t ignore China.”

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4 responses to “Put Your Money Where The Art Is

  1. Asian art is really cool and I think it could make a huge impact in the global art world really soon. Cheers!

  2. Pingback: Buying Opportunities in Contemporary Chinese Art: It’s Now in the East! « ChinaLuxCultureBiz

  3. Pingback: Dongfeng, Geely, Great Wall, BYD Eye Rapid Growth In Chinese Auto Market « ChinaLuxCultureBiz

  4. Pingback: Ravenel’s 10th Anniversary Spring Auction Of Asian Art A Success « ChinaLuxCultureBiz

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