With our banks and financial markets often offering less certainty,
lower returns, and higher perceived risk, the affluent are increasingly looking for tangible assets in which to invest their cash.
The Wall Street Journal has an interesting story this morning that looks at the booming state of the art market for masterpieces- "The Flight to Tangibles - Not for the first time, art is benefitting from economic gloom."
Why is it that the art market appears to be immune from the turmoil in almost every other sector of the global economy?
"It is simple," says David Nahmad, one of the world's most famous art dealers. "A lot of investors are distrustful of equities. They are terrified of cash that pays 0% at the bank and is threatened by the 'great inflation' lying one to two years ahead..."The key word in this analysis is "masterpieces". It is not that the art market is immune to asset bubbles and over-valuation. Speculative sectors, such as the contemporary Indian art market became in the 2000s, suffered a shake-out in the wake of the credit crunch. But buyers always seem able to stump up the cash when the best works of so-called "blue-chip" artists comes on sale.
Interestingly, the same is often true for real estate.
