The Safer Warhol Investment

Katya Kazakina follows up on Anders Petterson’s presentation at the Artelligence conference with a reminder that the best gains for the artist have been in what Petterson calls the “Investment Market” which contains works valued at $500k to $5m:

“As an investor, you’d be better off putting the money into a mid-tier category,” said Anders Petterson, founder of London-based art-market research firm ArtTactic Ltd., speaking at a recent conference in New York. “There’s still a sense of rarity in this segment, but at the same time more liquidity than at the high end.” […]

“The top is not driven by pure rational investment decisions,” said Petterson. “There’s a trophy element of wanting that piece that you paid the largest amount in the world for.”

Masterpieces tend to underperform the rest of the market, and postwar and contemporary art is no exception, according to research by economists Michael Moses and Jianping Mei.

“The returns on works that were purchased for seven figures and up are half of the returns on works purchased for five figures,” said Moses, co-founder of www.artasanasset.com, which calculates financial returns of art transactions.

“That’s not to say that people should stop buying masterpieces; it just means that they don’t make the best financial investment.”

Pricey Warhols Make Lousy Investments, Mao Beats Cohen’s $30 Million Liz (Bloomberg)