Art appraisal and storage

There are some good protections against inflation. We all know about them. Today, we want to highlight just one: fine art investment. Since 1997 art actually tracked inflation better than gold, achieving a 0.26 correlation versus 0.24.

First of all, despite the terrible times we are living, this market is flourishing. We see record prices in most of the good auctions. Some people think art is the tangible proof rich are becoming richer and poor poorer. We think it's another example of wealth protection after what governments are doing with their monetary systems.

Second, it's a very inefficient market, which makes it really difficult to deal on your own. An independent expert is needed.

Third, art is very illiquid with high costs of transaction, transportation, and storage. Besides, there are legal restriction and taxes just to move a piece. Related to this, in 1984 the main auction house, Christie's, developed Christie's Fine Art Storage Services (CFASS) in London that was granted “Exempted Status” by HM Revenue and Customs, meaning that property may be imported into the United Kingdom and stored without paying import duties and VAT. In 2010, Christie's opened another art-storage facility in NY. Nowdays, Christie's rents half of the space the Singapore FreePort offers, which works as its 3rd storage solution.

And last, art is very difficult to track. Some investors just follow the Mei Moses Index. You can learn more about this index here.