Investment Value And Investment Strategy Of Art

Since the21st century, the domestic high-net-worth clients haveincreased dramatically along with the prosperity of China’s economy andthe improvement of financial market. In consequence, traditionalinvestment products could not meet the requirements fromhigh-net-worth clientsand art investment, one kinds of the alternativeinvestment, unexpectedly sprang up in China. According to the AnnualReport of Art Market in2012, released by Artprice and AMMA (ArtMarket Monitor of Artron), the development of China’s art market hassignificantly affected the pattern of the global art market. The competitivesituation of the East and the West has been already changed. In fact,China has dominated the global art marketsince2010. In2012, theturnover of global art market was estimated at almost$12.26billion andChina has occupied$5.06billion in total.Encouraged by the prosperous art market, the Chinese institutionalinvestors and private investors all involved themselves into art investmentsince they were trying to look for new investment opportunities tosubstitute for the decline traditional investment. However, due tothe weakinvestment capacity and blindly optimistic view of domestic art market, some investors ignored the investment risk of artand finally paid thepainful price. In the second half of2011and the whole year of2012, thecontinuous bear market of China’s art sector made many investorssuffered a lot. Under such circumstance, domestic investors began todoubt the value of art investment and reconsider the risk of art investment.Also, they wanted to find out what kind of investment strategy couldreduce the investment risk of art.To find out the solutions, this paper is trying to re-examine theinvestment value of art works, analyze the development of the art marketboth at home and abroad, and predict the future outlook of domestic artmarket by using the research methods ofqualitative and quantitative.Secondly, based on the historical data and the experience from foreigninvestors, this paper will summarize the investment strategy of art fromthe perspective of investment mode; investment scale; investment periodand investment portfolio. Finally, this paper also tries to reveal theinvestment risk in the China’s art market, and provide somesuggestionsabout investment strategy and risk control measures to thedomestic investors, especially the institutional investors.