01 July 2014
Now in their 45th year, the Art Basel festivals have expanded to Hong Kong and Miami, attracting top gallery owners from around the world. At last month’s event, 285 galleries from 34 countries exhibited works from more than 4,000 artists, viewed by a record 92,000 attendees.
Sales during the show reportedly included a $32 million Andy Warhol self-portrait, but there was also plenty of buzz about younger artists like Brazil’s Christian Rosa.
The crowd included high net worth individuals skipping the household names and scanning for less-famous works with high potential upside. And there was the inevitable "flipping" – dealers buying a work in the morning, selling it for a higher price in the afternoon, and pocketing profit without ever touching the painting.
This wheeling and dealing has triggered talk of a bubble in the fine art market, as every boom creates anxiety about a bust. Many wealthy people burned by the 2007-08 financial crisis have been parking significant amounts of cash on the sidelines, and some of it is finding its way into the fine art market.
Investing in art will always pose short-term risks because markets go through mood swings, just as artists do. But the sector remains one of the best for investing across generations because so many people look at art and see something more than aesthetic beauty – a store of wealth.