Castlestone anticipates a 40 per cent rise in art prices to be realised over the next 24 months, as the art market continues to pick up from recent lows seen in Q2 2009.
Castlestone says the equities rally not only shows signs of improved market sentiment but also highlights an upward trend as equity prices are up by 70 per cent from the collapse suffered in Q4 2008.
Equities is considered to be a key indicator when analysing trends in the art markets, as further research shows art lags equities by six to 18 months, as noted by the Mei Moses All Art Index. Improved equity market conditions therefore prove a favourable investment outlook in art investments.
Gold, also a key indicator, not only tracks wealth but like art is an unleveraged, irreplaceable real asset, which investors turn to as a safe haven in times of uncertainty. Gold has appreciated by 50 per cent since its decline in November 2008, where prices were barely reaching the USD700 levels.
Art offers investors the opportunity to diversify their portfolios away from traditional asset classes and the recent recovery has therefore increased the number of sales volume at the recent February Sotheby’s and Christie’s Impressionist & Modern and Contemporary Art auctions up by 153 per cent in comparison to 2009 when markets where in sharp reversals.
The Art Market Confidence index has also reported a rise of 29.3 per cent, a six week high, in line with the S&P 500 up by 5.15 per cent in March.
Castlestone expects prices to continue appreciating before consolidating in 2011.
“In times of economic downturn it has become apparent that museum quality Post-War art has not only increased in demand but also in value, especially artists who have manifested their names in art history due to their unique techniques and lifetime achievements have contributed to sell well,” says Constanze Kubern, senior art adviser at Castlestone Management. “Modern/Post-War Art has shown to be a safer category pushing its share of global fine art turnover from 44 per cent in 2008 to 48 per cent in 2009, while contemporary art has dropped from 16 per cent to ten per cent for this year. Hence, we remain confident that the Collection of Modern Art Fund’s strategy of investing in modern/Post-War art is the way to move forward.”
Castlestone Management’s Collection of Modern Art Fund invests in Post-War art from deceased or non-producing artists represented in the AMR Post-War Art 50 index. Artists include Andy Warhol, Yves Klein, Jean-Michel Basquiat, Lucio Fontana, Jasper Johns and Willem de Kooning.