Outside the aesthetic return created by art, there are excellent reasons people are utilizing art as a new asset class. Art is attractive from a financial investment point of view over the long run as it is a store of value that generates moderate positive real return. Art has minimal correlation with stocks and bonds which offer diversification possibilities over time and across the business cycle.
More and more, there's a strong momentum recognizing art by investors as an investment asset class, not to mention almost anyone with an art budget. Society becomes more educated in their estate and financial planning and they begin to view art as a sophisticated investment. Many take on a deeper and measured approach to portfolio management and are willing to consider diverse strategies that encompass more realistic and possible investment classes, such as art and other collectible assets.
Notably, the current socio-economic context creates a demand for ‘real assets’ because many lost a lot of money in the financial crisis by investing in products they did not understand and are turning back to things that are closer to their heart and which, at the same time, offer protection and a return on investment.