Analysis of the Art Market as a Financial Market

In the mid 1970s, very few people thought of art as an investment. Several economic, demographic, and cultural trends began to converge in the late 1970s to change the art world almost beyond recognition: the coming of age of the “baby-boom” generation - popularization of the art museums, an American society becoming more conscious of fine cuisine, fashion and fine art - “Europeanized,” and the economic fuel of the inflation panic in the late 1970s to early 1980s. The result was the investment of monies into tangible assets such as art. In addition, the marketing surge of auction houses and promotion from business magazines supported this change of consciousness in the art market. Buying art was no longer perceived as a pure luxury. It actually made business sense. A whole new generation of collectors emerged, who perceived of buying art as solid-assets, not merely indulgence. The increased competition among buyers, and the vastly increased speed of the art market, has led many of the most active collectors to employ professional art advisors to help them sort out the opportunities and help them make decisions. Whatever the state of the economy, art market enterprise will remain a rare and desirable commodity