Afrikanizm Insights
There has Never Been a Better Time to Invest in Art
While the pandemic has had wide-ranging consequences for many areas of our lives, one unexpected silver lining is that more people are starting to see the benefit of art as a viable form of alternative investment.
In a year marked by economic uncertainty, many were reluctant to invest in traditional asset classes such as stocks and property and instead looked to art as a value-preserving asset as they sought to diversify their portfolios and mitigate these precarious times. According to DollarSprout, art consistently delivers average returns of 7.6% and, because it is unaffected by how the financial markets are performing, is a much more stable investment.
As we face the highest inflation rates we’ve seen in 40 years, art can serve as a good hedge against inflation. People with a lot of cash on hand are looking to buy hard assets such as art or real estate to protect their wealth. As a result, we’ve seen strong increases in auction values during recent high inflation. Turnover and transactions reached a new all-time high, and more artworks were sold than ever before.
There has never been a better time to invest in art, and the interest in art as a viable asset is only set to grow in 2022. While it is natural that art trends will come and go, immersing yourself in the art world and keeping an eye on what artists and the community at large are talking about is key to spotting profitable developments within the market.
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