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Submitted by: Frank Forster

There are always financial implications of including art as an alternative asset class. While this used to be a non-transparent market, it is becoming more accessible due to the increasing availability of indices and data on the art market. Investors are always looking for alternative assets and efficient solutions to minimise risk, while reaping high returns.

The need and desire for investing in art has grown due to the availability of art price data, which has enabled the consumer to make more informed and effective decisions. These market reports, Databases & indices, have become essential analytical tools for art investors, who can use this data to assess financial performance. The main problem or disadvantage of these tools is that the information can be neither consistent nor complete, which can distort results when compared to indices for more transparent markets.

The search for greater returns via alternative asset classes has grown and has been driven by the comparatively poor performance of traditional asset classes in recent years. The need and desire to generate high risk adjusted returns from diversification into assets which offer low correlation with bonds & equities is very desirable.

There has been a huge growth in traditional alternative investments such as real estate,

and hedge fund investments but additionally, there have been a number of funds specialising in art which have recently emerged which offer a beneficial diversification strategy with low correlation with traditional asset classes.

Art funds also offer investors the ability and chance to invest indirectly into the art market. Indirect investment can lack the aesthetic pleasure from possessing the art but financial gain can be made by combining resources with the help of professionals. The art fund market is a young and growing market still in its infancy. It provides opportunities but there are few alternatives and these tend to be only available to investors willing to invest at a substantial level.

Entry levels are at present still high. In time, these funds may become more accessible to the mainstream investor through pooling joint interests. Many studies have shown that art s low correlation with other asset classes offer diversification benefits from holding art in an investment portfolio & provide support for investors to consider art an attractive addition to their investment strategy.

So if you are an investor, maybe the art market is a market you should look to exploit as it offers high returns and is a growing market. There will always be risks associated with any investment but the art market is certainly an area for potential gain and great rewards. However if you are looking to invest, it is wise to get the assistance of an art market professional who can give credible advice on how to approach the market best and what to look out for etc.

Based on reports, studies and research, it has been proven that the art market is becoming a hub for investors looking to expand on their current portfolios and a way to enhance poor performing portfolios.

About the Author: Art Market Analyses publish financial performance art index data on the global Art Market for professional Art Investment, Art Appraisal, Art Valuation & offer Art Advisory Services.For more information, please visit

artmarketanalyses.com/

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