Tuesday, February 13, 2018

Again about investments What is

Again about investments. What is dangerous about art investment?

Even 20-30 years ago,
hedge funds or private equity funds
were some exotic for investors.
Now nobody will be surprised by this. alternative investments
It is becoming more and many respected
financial institutions offer their
customers the opportunity to invest
in works of art, antiques and
wine. It can also be a violin
famous artists and musicians, valuable
collection watches, stamps and even whiskey.


It sounds tempting? But
Is it possible to make money on the purchase of these
of things?


It would seem that everything looks
not bad. For example, prices for paintings by old
masters do not change much after
index S P, and consequently, there is
chance that in the case of stock market decline
the yield is not art
suffer. And indeed, the art investment
- it is not just a soulless figures in the banks,
and wonderful things that can
just visually pleasing lucky
investor.


However, for some reason,
the major investors are in no hurry
buy creations by Pieter Brueghel
A Senior or collection of Ming porcelain
for their investment portfolios. There are many
reasons. This low liquidity,
the opacity of the market and high costs.
And does not the fact that these investments
really bring alternative
income.


We have the results of JP Morgan
study, which was carried out in 2012
year. Over the past 25 years the price of art
absolutely did not respond to
US indexes movement and fall
bonds and real estate. But in practice,
excessive liquidity and high inflation,
that provoke bubbles in financial
markets directly affect the cost of
virtually any collectible goods.


Rather, the impact on prices
alternative other financial assets
markets. For example, a huge rise in prices
French Impressionist paintings
(In 1980-90) coincided with the boom in the Japanese market
property. Japanese insurance
companies pay tens of millions of
dollars for sunflowers and irises Van Gogh.
In May 1990 even recorded two records
- Japanese tycoon Saito bought Roei
"Portrait of Dr. Gachet" Van Gogh for $ 82,5
million and "Ball at the Moulin de la Galette" by Renoir
for $ 78.1 million. Then it was the collapse of the market
Real estate and "appetites"
Collectors investors fell sharply.


Another example -
at prices unmatched collection growth
Bordeaux wine after the 2008 crisis. Then
for three years, the index Liv-ex 100 Benchmark Fine Wine,
tracking the change in prices on the most
famous wines, rose by 80%. wine on
auction sold out instantly,
Chinese press trumpeted about love Chateau
Lafite ... But I love this ball short. When
turned post-crisis stimulation
Chinese economy and reduced available
credit resources, the love of the French
wines began to decline, and the index lost
35%.


What is significant - 8
of the 15 most expensive auction sales
art objects were made
after 2009, when the US
the printing press on full
power, and real interest rates
They were negative. What will happen to
appetites of investors when the program
incentives will be phased out, and the dollar
continue to strengthen?


The previous growth rate and
strengthening of the dollar in the 1990s did not cause
is no market price records
art. In fact, if you buy
paintings, wine or even postage stamps
with the aim to make money, then you must immediately
tune in rather long
investment horizon. Of course,
It happens and happy stories when
almost accidentally bought a thing
more expensive in some times two or three
years, but this is perhaps the only exception
the rule.



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