9 Jan 2007

Art Investment

The following article was published recently in Financial Times, Bangalore, and I thought of sharing it with you.
Investing in Art
By Nalini S Malaviya

Last year ended on a high note for Indian art, and the accompanying hype and awareness about it is luring a growing number of investors to include art as part of their investment portfolios. Several art funds were also launched recently to meet this growing demand, while, the success of recently held auctions has reaffirmed the worldwide interest and the arrival of Indian art on the global stage. With paintings selling in crores of Rupees, the prices of artworks have escalated sky-high.

The big question is - is the timing right to invest in Indian art? It’s very difficult to answer because there are mixed responses to it, while some experts believe that in the near future prices may need some amount of correction and will become more realistic. On the other hand, there are people who believe that increased prices are an indication that Indian art is finally getting its due and therefore prices will continue to appreciate in accordance with this trend. However, what also needs to be considered is that any correction that may happen will have a minimal impact on the smaller investors, since the prices of new and upcoming artists will see a negligible change, if any.

Conservatively speaking, at present, Indian art is seen to appreciate at the rate of 30 percent per annum, while prices for some artists in the top bracket have doubled and even trebled in recent times. Therefore, it does look like a good time to invest in Indian art, especially for the smaller investors, but one should go ahead only after completing all the necessary homework.

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