Curious to know how Art as an alternative asset can be included in an investor's portfolio to generate significant alpha (if possible); and how & to what extent can this asset be fully maximised as a hedge or diversification tool?
Understand that this is a relatively new area with limited historical prices available for further analysis and research, but I am highly curious as to how Art can potentially be used as an investment tool.
I'm open to further reading on this topic! If anyone has solid research materials to share with me—please do!
For assets that are not actively and transparently traded in the market place, Reliable Prices would not be available. This implies that it is almost impossible to accurately determine the correlation of these kind of assets (say paintings, antiques etc.) with other assets or asset classes. Correlation is the cornerstone for diversification of a Portfolio (based on Portfolio theory). In absence of this basic requirement being satisfied, it may be difficult to fathom generation of any risk adjusted excess return.
Hi Valerie P.
it's a good question that I didn't investigate despite my interests and formations in Art and Digital economy.
You have websites like https://www.artprice.com/ where you can achieve a part of what an investor could expect to manage a portfolio but it seems that it's not yet enough open.
I think Artwork Archive is one of the best solution to manage an investor's portfolio of Art assets even if you're an artist, a collectionner or an organization like a gallery.
https://www.artworkarchive.com/collectors
It's a cost but when you start to spend or win money with art, you need tools to manage this activity. But, I would like to know too if there are others tools for lower costs and if these assets could be integrated in a more global investor's portfolio.
I can see that they offer APIs to integrate the portfolio in a website so there are technical options to achieve this https://www.artworkarchive.com/artists/website-integrations
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