Art Market Monitor

Global Coverage ~ Unique Analysis

  • AMMpro
  • AMM Fantasy Collecting Game
  • Podcast
  • Contact Us

Wealthy Eschew Equities; Will Art Benefit?

August 17, 2011 by Marion Maneker

The Wall Street Journal’s Robert Frank had a story on Monday that may tell us something about the upcoming Fall auction season. High Net Worth Individuals feel burned by equity markets over the last three years. They’re taking refuge in defensive assets that all behave similarly to art:

“Today, my first principle of investing is do no harm, don’t make major mistakes,” said Mr. Mantell, president of New York-based Mantell Advisory LLC. “It’s not about chasing returns anymore. For me, it’s about real diversification and not being so dependent on traditional equities.”

After taking big risks and big losses in 2008, wealthy investors have become the Cassandras of the financial world, hunkering down with cash, gold, farmland and other safe-haven investments. Their “fear portfolios” largely protected them from last week’s market gyrations, when the Standard & Poor’s 500-stock index spiked up and down more than four percent a day for four days straight.

Yet they are also imposing a national price. Recoveries are often led by the investing and risk-taking of the wealthy, and the rich have traditionally been more optimistic about the economy than everyday investors. Yet current surveys show the rich are among the most pessimistic about the economy. Rather than investing in stocks or companies that can create jobs, they are betting on continued volatility and slow growth by hoarding cash, gold and other defensive assets.

“If the wealthy run into the proverbial bunker, then the economy will falter,” said Mark Zandi, chief economist at Moody’s Analytics, a division of Moody’s Corp. “A loss of faith in our economy can quickly become self-reinforcing and self-fulfilling.”

Once Bit, Rich Shy from Risk of Stocks (Wall Street Journal)

More from Art Market Monitor

  • Calder's Jewelry Stars in ShowCalder's Jewelry Stars in Show
  • Perry Rubinstein Arrested in Long-Simmering Art Dealing DisputePerry Rubinstein Arrested in Long-Simmering Art Dealing Dispute
  • Sotheby’s Contemporary Evening Sale = $341.8mSotheby’s Contemporary Evening Sale = $341.8m
  • DiCaprio Buys DalíDiCaprio Buys Dalí
  • Christie’s NY PWC Evening Sale = $852.8mChristie’s NY PWC Evening Sale = $852.8m
  • New York Photography ResultsNew York Photography Results

Filed Under: Economic Trends

About Marion Maneker

Want to get Art Market Monitor‘s posts sent to you in our email? Sign up below by clicking on the Subscribe button.

Top Posts

  • Keith Haring’s 1989 Retrospect Comes to Sotheby’s London Prints Sale
  • British Modernists Draw Deep Bidding in Christie's $42 M. London Sales
  • Following Legal Dispute, Restituted Pissarro Recovered From Toll Collection To Sell at Auction
  • Bonnie Brennan and Jennifer Zatorski Rise at Christie’s
  • Four of Picasso's Women Valued at $28m Come to Christie's from Rose-Walters Collection
  • French Impressionist Art from Lanvin Family Holdings to Sell at Sotheby’s Auction
  • How to Chant Like an Auctioneer
  • Tony Podesta's Secret Art Buying
  • Norman Rockwell's Not Gay. But Is He a Great Artist?
  • Vienna Secession Painting, Long Thought to Be Lost, Sets a Record at Auction
  • About Us/ Contact
  • Podcast
  • AMMpro
  • Newsletter
  • FAQ

twitterfacebooksoundcloud
Privacy Policy
Terms & Conditions
California Privacy Rights
Do Not Sell My Personal Information
Advertise on Art Market Monitor