Many people enjoy taking an occasional risk by investing in the stock market or Forex trading.  We’ve all heard advice from trusted advisors giving us tips on where to sink our investment dollars for the best chance at a high return.  Seldom will any seasoned financial adviser recommend investing in art — but from 1875 to 2000 art has consistently outperformed fixed income.  Since late 2009, art has also outperformed equities in the midst of recent stock market losses. To gun shy investors who have been on the losing end of those scenarios, this may sound comforting, but people should know that investing in art is far riskier than investing in stocks or the foreign exchange. There is no regulation in the trading of art, and values vary widely over short amounts of time. With transaction costs of up to 25%, purchases sometimes negate profits altogether. Let us also not forget that the public’s general appreciation of a piece of art at a given time in history can have a significant and even detrimental effect on its value;  investing in art is like inviting the fickle public to decide somewhat arbitrarily what your money is worth.

With shifting and sliding stock market returns and interest rates at their rock bottom low, skeptical  investors are looking seriously at alternative investment avenues. Some of them believe that different kinds of investments like the purchase of fine art, rare wine and vintage stamps could save the day.  The performance of these alternative investments offers soem hope. The indices used to track the performance of  art investments have held steady through the recent economic recession, and the auction houses are fetching record prices. If the stock market is just too risky for you right now, and the idea of dropping American dollars for those of other currencies in the foreign market seems too risky for you, and you happen to be lover of art anyway, then investing in art might be the thing for you.