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Art Business And Art Investment: Is It Profitable?

Pictures of great artists, the modern art, unique books and other subjects of art are even more often considered recently not only as culture subjects, but also as investment objects. Often in news we hear that at the next auctions, somewhere in London, the picture is sold for some millions of pounds sterling. Possibly, many of such messages force to reflect on investment prospects in art subjects.

In America, for example, investors began to concern seriously the art market after in 1950 two New York professors Janping Mej and Michael Mozes have invented an index (Mei-Moses Index), describing dynamics and behavior of the prices for art subjects. As a matter of fact, then they haven’t made anything especial and have simply generalized available data on sales of the similar goods by the largest auction houses of New York, but it has given to investors confidence.

Today, after almost 60 years, it is visible that for these years growth of Mei-Moses Index should lagged behind from known for all S&P 500, but also considerably overtook it in some years. Since then in the world there were many various families of art indexes. They differ as described creativity, on the countries, years and many other criteria. Undoubtedly, they, as well as general development of an infrastructure, promoted arrival on the market of the institutional investors, which steels to form art funds. As well as classical funds of shares or real estate, art funds began to diversify portfolios and to form them of products of various directions and fine arts epoch.

One of the first professional investors became Fine Art Fund (Great Britain), based on Philip Hoffman, the financial officer of auction house Christie “s International, in London in July, 2004 the Fund operates with pictures both young, and the deserved artists of impressionists, modernists and is calculated for 10 years and the minimum installment constituted at the moment of opening 250 000$. As Mr. Hoffman declares today, the mid-annual income has already exceeded 50 %. These figures yet don’t send confirmation, but it is precisely known about the British Railroad Fund, started to work n 1974, and by the time of closing in the late eighties shown profit of an order of 11,5 % annual.

Today, when influence of financial crisis is felt all over the world investments into the art market become more and more attractive tool. Private and institutional investors form collections, buying pictures, antiques and many other things that concerns art subjects, and also create the unique, especial reputation which cost can’t be estimated in one currency of the world.

Today for increase of investment appeal of the subjects of the art, many collectors in every possible way advance them as trying to make it famous among people. So, for example, collection demonstration in this or that museum or gallery, and also single sale of some subject at prestigious auction can change collection cost considerably.

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