Tuesday, January 11, 2011
When "Art As Investment" Gets Tricky
Today's art news headlines include a story on the Art Exchange
, essentially a stock market for art. This French company's insistence that participating galleries continue to show and actively represent the artworks on the exchange (to support and increase their value) reminded me a lot of the working model for the Artists Pension Trust
, which led me to the MutualArt
What I found on the MutualArt website was a tad disturbing. On the "About" page's right hand column I linked to a CNBC video
--an interview with MutualArt founder Al Brenner. The financial reporters asked questions I would expect from financial reporters--they asked about annual returns, "why buy now", and the not unusual "how do I go about unloading this stuff?" This is normal-speak for financial advisers, but absolutely unheard of for art advisers and art dealers. The worst part of the interview is that rather than explaining why a collector shouldn't go about unloading a work of art a year after he/she purchased it, Mr. Brenner goes on to suggest that a buyer can expect an approximate 10% return annually on investment. WHAAA?? What happened to reinforcing the idea that a collector should buy what he/she loves and enjoys most? When the TV reporter says, "I just don't get this--I don't understand it", I wish that Mr. Brenner would have said "well, you don't have to understand it. Buy what you're interested in--what holds your attention and speaks to you" rather than suggest that she wasn't enjoying it because she hadn't done her research on its auction history.
ALSO, I found it especially irresponsible for Mr. Brenner not to point out the problems with "flipping" artwork purchases. This can be totally destructive and detrimental to an artist's career (it can ruin an emerging artist's market). Since MutualArt is acting as a "source of art information" and apparently a guide to art collectors, it should certainly reinforce important art market guidelines, such as LONG-TERM INVESTMENT
as well as the lesser known rules, hurdles and "buyer-bewares" (right of first refusal, authentication, condition, etc.)
My two cents.