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January 16, 2014 at 01:04 PM
While equities were strong across the board last year, the same was not true of the art market.
Artistic works produced after World War II and in the current era saw their values rise about 10.60% on average, while traditional Chinese works of art increased by 12.50% in 2013, according to Mike Moses, co-founder of Beautiful Asset Advisors in New York and co-developer of the Mei Moses Fine Art Indexes.
“In general, traditional Chinese works of art have been the strongest category in the last 10 years and Post-War and contemporary has been the strongest category in the last 25 years,” said Moses, in an interview with ThinkAdvisor.
His firm’s All Art Index turned in an overall return of 2.30% for 2013. “It went up a tiny little bit but it was basically in negative territory almost the entire year and then eked out a small gain based on the November and December sales,” Moses explained.
The Mei Moses art indexes are unique in that they are based on a proprietary database of repeat sale pairs created from transactions in the United States art auction market, principally the New York auction houses. They track transactions for specific art objects over time.
When an item comes back on the market and is sold to a new buyer, the firm updates its database with the new information. That data then feeds into their average compound-annual-return calculations for the seller’s holding period and each art category.
Works in the Old Master art category generated an average loss of 14.20% in 2013, and Latin American paintings saw their sales values decline 15.70%.
“Old Masters has been the weakest category for many years, so [last year] isn’t that much different,” Moses said. “What continues to be somewhat unusual is that the high-end works, the trophy purchases, tend to get all the headlines, but the majority of the market is sort of well below that.”
The trophy works are only “trophies” because of the high prices they command at certain times, he notes. “Our studies have always shown that masterpieces tend to underperform the market.”
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