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By Daniel Gross, Slate Fine art is making huge financial news, what with cosmetics-heir-turned-super-collector Ronald Lauder paying $135 million for a Gustav Klimt painting and Sotheby's and Christie's posting gigantic numbers at their Impressionist and Modern art auctions. Rating masterpieces by their sales prices may seem irredeemably gauche and beside the point. Nobody would pay $135 million, or $10 million, for a painting for solely economic reasons (unless it was a dealer who had a buyer lined up). Collectors like Lauder buy paintings for prestige, status, ego, or a passion for collecting. Lauder has spent huge sums of the family's fortune creating a jewel of a museum devoted to Austrian and German art. But at these prices, fine art certainly represents a huge investment. And not even billionaires like to see the value of expensive purchases decline over time. So, it's worth asking: Is fine art a good investment? For the last several years, two professors at New York University's Stern School of Business, Michael Moses and Jiangping Mei, have been compiling data that allows them to track the long-term performance of fine art. The result is the Mei Moses Fine Art Index. The Mei Moses index focuses on mature artists whose works command significant prices at auction. They take the original sales price and then subtract it from the most recent sales price at Christie's and Sotheby's in New York and calculate an annual return for a single painting. So, for example, a J.M.W. Turner view of Venice sold at auction at Christie's in London on May 29, 1897, for $35,000 and then sold at Christie's in New York last April for $35.8 million—which yields about a 6 percent annual return for 109 years. Which is pretty darn good. Moses and Mei have compiled 9,000 such repeat-sale pairs and add between 300 and 400 every six months, enabling them to compile an index. (The paintings in the index aren't all blockbusters. Moses estimates that the median size of recent transactions charted is about $200,000 or $300,000.) As their most recent update shows, over the last 50 years, stocks (as represented by the S&P 500) returned 10.9 percent annually, while the art index returned 10.5 percent per annum. And in the five years between 2001 and 2005, art trounced stocks. But not all art performs equally. In recent years, old masters haven't done so well, while American art before 1950 has been soaring—up 25.2 percent in the last year alone. And across categories, masterpieces (like the Klimt that Lauder just bought) tend to underperform lower-priced paintings by a substantial margin. Why? Like blue-chip stocks, well-known paintings by blue-chip artists are known quantities and offer safety and stability. As with stocks, the greatest opportunity for growth in art values comes when investors suddenly focus their attention on a hot new sector or name. There are some obvious differences between Van Gogh canvases and Verizon shares. Art is far less liquid than stocks: You can't simply push a button and sell a Picasso tomorrow. And while you might assume that the fortunes of the art market are closely to tied to the fortunes of the stock market, Moses found that fine art actually has a very low correlation with stocks and a negative correlation with bonds. "In some sense, it's a good portfolio diversifier," says Moses. Like stocks, art is susceptible to fits of irrational exuberance. In 1990, Japanese executive Ryoei Saito capped off the Impressionist art bubble by paying a whopping $82.5 million for Vincent Van Gogh's Portrait of Dr Gachet. Between 1985 and 1990, the Moses Mei art index returned about 30 percent a year—the same unsustainable rate at which the Nikkei grew in that period and at which the S&P 500 grew in the second half of the 1990s. Despite today's massive prices, Moses notes, the mood surrounding the art market is nowhere near as exuberant as it was when Western Europe's cultural patrimony was flooding into Japanese corporate boardrooms in the late '80s. In recent years, financial whizzes have created investment products surrounding all sorts of stock, bond, and commodity indices. But there's been little effort to turn art into a security. In the 1970s, the British Rail Pension fund, with Sotheby's assistance, famously committed about $70 million to fine art. The huge portfolio it built up came to include works by Canaletto and El Greco and proved quite profitable—a compound annual return of 11.3 percent between 1974 and 1999. As Scott Reyburn notes, Britain's rail workers were fortunate that the fund chose to cash in a bunch of Impressionist and Modern works at the height of the bubble in April 1989. More recently, funds have been created to allow rich people to invest in a portfolio of fine art assets. One of the funds, Fernwood Art Investments, created by a Merrill Lynch executive and a veteran of Sotheby's, inspired a Harvard Business School case study. But even in this hothouse environment, it failed to launch. The London-based Fine Art Fund, created by a former Christie's executive, is still in business but hasn't made much of a mark. That's not surprising. Sure, the data shows that art performs well as an asset over time. But for the wealthy people expected to invest in these funds, much of the satisfaction of buying (or investing) in art is being able to hang it on your wall and show it off. Someone who is willing to commit a few hundred thousand dollars to art would probably be more likely to go buy paintings at Christie's than invest in a private equity fund that buys paintings at Christie's. One of the great ironies of the art world is that artists rarely benefit as the value of their work appreciates over time. But one art fund is aiming to change that. Artists who join the Artist Pension Trust pool their pieces with those of other artists and then receive a stream of income down the road as the trust sells their pieces—and those of other artists. In other words, the best way to make money on art as an investment may be to give it away.
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Nude paintings have proved to be the most popular art sold by the Suzy Salmon Art Gallery, outstripping sales of all of our other artworks by far. They are especially popular with women, although whether they are purchasing for the men in their life or for themselves we don’t know! Nudity in art has always been popular and more acceptable than public nudity of real people. For example, a statue or painting representing a nude person may be displayed in public places where actual nudity is not allowed. Despite saying that, however, art often depicts a nude person with a piece of cloth or other object covering the “rude bits” seemingly by chance. A 1960s comedy sketch featuring the comedians Peter Cook and Dudley Moore admiring Cézanne's Les grandes baigneuses in the National Gallery humorously suggested that there must be hundreds of paintings that aren’t publicly displayed because the pieces of cloth just didn’t fall in the right places while the artist was painting them…. The Roman Catholic Church many years ago organised the so-called “fig-leaf campaign” to cover nudity in art, starting with the works of Renaissance artist Michelangelo, but the Church has since removed such fig leaves and restored the works. In contrast, it was conventional in ancient Greek art, from the time of the Archaic period onwards, to represent deities and divinised humans (or “heroes”) in a state of heroic nudity in paintings and sculpture, and it remained so throughout the classical and Roman periods. The nude has become an enduring genre of representation art. There is often debate regarding whether a figure in art is either nude or naked, for example in the works of Francis Bacon, but whether the painting that you want on your wall is a nude or a naked lady, as long as you like it, then it doesn’t really matter! In 19th-century Europe it was common to have two paintings of the same subject (one naked and the other clothed) which could be hung the same place on the wall. Depending on which guest was visiting, one or the other would be shown. In the 21st-century we don’t have to worry about offending our visitors, and a tasteful nude will look good in the bedroom, sitting room or wherever else you fancy. You will find a large selection of nudes and erotics in the Suzy Salmon Art Gallery. Some are reproductions of famous paintings such as Le Tub (1888) by the Swedish artist, Anders Zorn, or Harem Pool (1876) by Jean Leon Gerome, and others are retro-style art, but whatever your taste we hope that you’ll find something to please the eye.
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