Cornwater Fine Art Gallery - Specialist dealers to the trade and retail in original paintings and signed prints by L.S. Lowry, David Shepherd and Russell Flint.

What's Better, A Roller Coaster Or Fine Art Investment?

Do you like roller coasters? Many of us enjoy the thrill associated and never quite seem to "grow up" as we continue to enjoy that summertime trip to an amusement park, just for kicks. Doing an inverted loop and screaming along with your companions is one thing, but it's not the kind of experience that you want to savour each and every day as you watch your retirement nest egg become subject to the extreme vagaries of the current markets.

We have scarcely seen such instability as we have been noting in recent times. We're well aware that it has much to do with the bursting housing bubble and what we now realise to be an unsustainable growth in equity during that time. Whether an investment in the stock market is a good idea now or not is open to extreme debate, especially as the political parties whose job it is to try and stabilise a rough economy seem to be somewhat inept.

If you're really not sure whether you ought to be putting as much of your hard-earned money and resources into stocks, what other options do you have? Many of the best financial advisers suggest that you should diversify even at the healthiest of times. Property is traditionally a good idea, but other positions could be assumed as well. What about art for example? Have you ever considered whether fine art investment could be a significant and potentially profitable part of your plan for the future?

From the outside looking in, if you're not experienced here, the initial impression would be that fine art can indeed return some significant profits, especially as we hear from time to time about those unbelievable selling prices at Sotheby's. Are those particular investors just lucky, being at the right place at the right time or is there something to be said for considering fine art as a true investment?

We could take some inspiration from the work of two professors at the Stern School of business at New York University. Jiangping Mei and Michael Moses put a great deal of time and effort into composing what they subsequently deemed the Mei Moses Finite Index. They used particular formulae and a dedicated approach to compile and determine how fine art had performed over the long term, to see what kind of investment was possible.

They focused on the work of mature artists and essentially calculated the difference between the original sales price and the most recent sales price at significant auction halls in London or New York. Some of their work is indeed eye-opening and in one particular case they were able to calculate that a Turner original painting of the city of Venice yielded a solid 6% annual return over a period of more than 100 years (from the date of its original sale to its most recent auction release in New York) for just over What's Better, A Roller Coaster Or Fine Art Investment? 5 million. Hardly to be sniffed at and in the long term probably a better return than some of the even more established stocks on the conventional stock market. Maybe you should have another look at those signed limited edition prints you were considering?

David Tatham, fine picture dealer for more than quarter of a century, has an extensive knowledge of Sir William Russell Flint's biography. Signed, prints and drawings can be seen and purchased from the website.

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