Rich investors are buying art in droves while new artists struggle.
This may sound counterintuitive, but the wobbly world economy is driving fine art investment like never before. Most people are short on the kind of disposable income required to purchase notable works of art these days. But the deep-pocketed 1 percent are going at art auctions hammer and tongs, ponying up record-busting sums across the fine art spectrum. Rich investors are now seeing art as a stable form of wealth management in uncertain times, especially when compared with the imperiled dollar or euro. And a lot more fun, apparently. As artist John Baldessari told The Economist, "you can acquire something much better to look at than a stock certificate." Paying a record price is considered a smooth move, fueling both the value and allure of the work, as well as the buyer's. Case in point: At an art auction at Christie's last spring, 41 works sold for more than $1 million apiece; nine for more than $10 million. In May, the 1961 Mark Rothko painting "Orange, Red, Yellow" sold for $86.9 million. And Andy Warhol's "Eight Elvises" recently garnered a cool $100 million, thank you very much.
Now enter the Chinese, who know a good investment when they see one. They have quietly been paying top prices for masterpieces, and China has just recently surpassed the United States as the world's largest market for fine art. But the top is the top.