With the latest round of stock market gyrations from the Great Recession aftermath, where can you put your money? With assets measured in stability, the home investment was always considered rock solid. Now, is it US 10 year bonds yielding 2.5%? The idea of investing in decorative art items doesn’t sound like an impossible asset to use as a hedge to all the other options.
It’s a funny thought that I actually don’t like to push decorative art objects as “investments” because I don’t like to speculate as much as know what I’m buying. I can teach someone about an item but if they have a different idea of value, how can I fill the gap. Perhaps this item warrants consideration as an asset with a valuation. Like real estate, whether the same property or one that is similar, the time line seems to change with the price. The stock price of GE is a moving target. But the decorative arts have other measures for value. They don’t only appear on a financial statement and they have a form and physical qualities; what’s that worth?
The present economic environment has cause for any investor to look for a safe haven for their money. We are in a world where diversification is a necessity. The alternatives are US and foreign debt, stocks or gold verses real estate and art. The last two are in their own class because they are very tangible and can be functional and unique. However being of a physical nature, art and real estate lack the medium of an exchange for public trading. And the trading is not as easy as picking up the phone and calling a broker to execute a sale of stock to raise some cash.
As an investment, the safety of any asset is imputed in the price. Holding an investment without any return is better than losing the whole investment. My point is that we have a true asset class of decorative arts that is poised for discovery as a viable and preferable asset that has a consistent return of function and or aesthetics to its owner. While contemporary art has experienced a mammoth speculative and taste trend, traditional forms of art haven’t. The decorative arts, (short of dumbing down to inexpensive vintage 20th Century items), has certainly suffered to a greater degree.
Nostalgia for a time of good value, stability, and pleasure from the investment of your money sounds like a throwback to the Eisenhower era. We should only realize how good it was for most people. While that was a different time with different values, the collecting of fine art and decorative arts was widespread and attracted a wider age group. Even young people had respect for older items and knew some items were “special”. Where did this disconnect happen?
Somehow, my generation lost touch with the thrill of owning objects that now seems mundane compared to “trophy” items like cars, jewelry, technology, and name brand products. Buying at Sotheby’s or Christie’s has some of those characteristics. The decorative arts need a venue to make them appealing and approachable to the luxury market consumer, but not with the rigged auction format. Perhaps buying it at Newel will be that mark of distinction.