“We track the repeat sales prices which yield true returns,” Moses said. “Our index gives a measure of how art has been doing over time as a financial asset, but it’s difficult to replicate what it does because you can’t buy the index.”
The lowest price point for a painting on the index is $3,000 to $4,000.
“The index gives investors a way to build confidence levels around buying and selling paintings. It’s not very different from a stock broker using the S&P 500,” said Janet Yuen, an analyst in Atlanta, where Moses will be giving a presentation on art investing for the CFA Society of Atlanta on April 23.
The index includes any work of art that comes up at auction at Sotheby’s or Christie’s.
“We have 34,000 repeat sale pairs in our database. We use the purchase price and sale price to determine returns,” said Moses, who is co-founder of Beautiful Asset Advisors, which manages the index and acts as a consultant to art investors.
The index, located at www.artasanasset.com, tracks seven collecting categories, including Chinese traditional works of art, impressionist, modern, old masters and post war and contemporary.
Art As Diversifier
“The overall view is that 2013 is part of a new decade, which is post the 2008 financial crisis where equity markets are volatile and interest rates are low so, art may be a good place for people who have a well-rounded portfolio of stocks and bonds to invest in along with oil, gas, energy and wine,” said Yuen, who purchases artwork from local artists.
The art index doesn’t track individual artists, such as Jeff Koonz, Basquiat or Andy Warhol.
“They are in our database under the post-war and contemporary category, but individual indexes require one thousand repeat sale pairs to build an index and no artist has that kind of record,” said Moses.