How Much Money Can I Make?

Although investments in the art market are slower to give returns, they are less risky and outperform most other assets, including the stock exchange. Examining the fifty-year period from 1953 to 2003, Jianping Mei and Michael Moses found that the average annual return from a work of art was 12.6%. By comparison, the S&P 500 grew by an average of 11.7%.

The returns on Russian art have done even better, outstripping the growth in the average prices for world art over the past fifteen years. According to the Mei Moses Fine Art Index, a work of art purchased for $1000 in January 2001 would currently be worth $1751 in June 2015. But a Russian work would now be worth $3295 – almost twice as much!

Looking at the figures for the past twelve months, we see that Russian art has increased in price by 26.87% (compared to 7.86% for world art). Russian painting has increased by 13.49% (compared to 4.59% for world painting), while Russian graphic art has grown by 39.94% (compared to 12.38% for world graphic art).

Art is a particularly attractive investment in times of volatility, when people seek to diversify their portfolio or just hang onto their capital. The art market is generally unaffected by events in financial markets. Prices remain virtually unchanged in times of recession, inflation or war. If anything, political and economic instability tends to increase the value of artwork.

How much money you can make in the art market depends on a number of factors. Buying and collecting art is a long-term investment. The longer the period a painting is held, the more it will gain in value. Another factor which can increase the price of a work of art is its inclusion in catalogues and exhibitions.

In order to achieve returns above the average rate, it is very important to acquire interesting works with a potential for growth. The greatest price rises occur among museum-quality works by well-known artists. The investor must be sure to purchase one of the artist’s classical subjects with a good exhibition history and an impeccable provenance.

But what if I know nothing about the history of Russian art?