Investing In Art: Hirst, Warhol Outperform S&P 500 As Artists Deemed Better Investments Than Stocks

If you ever find yourself choosing between some Warhols or a few stocks, we're here to make that decision easier. A new study has found that artwork by Damien Hirst and Andy Warhol vastly outperformed the S&P 500 over the past decade.

Bloomberg Businessweek has the scoop, and the numbers are very impressive. The value of Hirst's pieces have increased almost threefold since 2002, and Warhol's have risen fourfold in the same period.

The value of both artists' work has slipped since 2007, but Warhol's are back on the rise. Over the same period, the S&P 500 increased 7 percent.

Artnet provided the analysis as a way for those looking for alternatives to traditional investment to have some sense of reliability. Artnet's CEO, Hans Neuendorf, told Businessweek that the idea was inspired by the stock market, where the performance of companies is viewed individually and may vary widely. "Art has been a good investment over the past 10 years, but there are big differences in performance among artists," Neuendorf said. "It's more interesting to look at individual artists, in the same way that you look at stock-market segments, or individual companies."

So which other artists have stayed strong? Artnet's findings reveal Roy Lichtenstein, L.S. Lowry, Clyfford Still and Gerhard Richter as among the record-setting artists. In 2007, Hirst's works were selling for an average price of $901,214, but that was a year before he sold $126.6 million worth of art in a single auction. In a twist that nicely encapsulates the shift from traditional forms of investment towards the art world, the auction was held on the day Lehman Brothers filed for bankruptcy.

A similar trend is sweeping the upper echelons of Asia, with many investors turning away from the relative chaos of markets and instead amassing massive collections of Eastern art. Reuters notes that Asian art market turnover jumped 300 percent between 2009 and 2010, buoyed in large party by an emphasis on Hong Kong collectors.

Comments

[anfractuous]

11:03 AM on 12/23/2011

I'm sticking with tulips, thank you.

[Topdown1]

12:18 AM on 12/22/2011

Glad I read this. I was about to invest my billions in the stock market. I'll buy Warhol's instead.

[accelerando]

10:38 PM on 12/21/2011

It will work until tastes change, which they do from time to time. My grandmother had a book of 100 best paintings from the 1890's. You probably couldn't give the paintings in it away today except to some decorator with a taste for steampunk. Come to think of it, along the lines of "buy low, sell high" it would probably be smart to start acquiring some of those.

[hmargret]

09:05 PM on 12/21/2011

More show-boating. Warhol is history. Tertiary market junk. They tout it to re-engage the upper middle and lower wealthy classes. Hirst? Scammer.

Nothing happening in the art world today worth buying. It's like the McMansion syndrome....all capped out.

[Sepiano]

10:52 PM on 12/21/2011

Maybe this will be the next bubble?

I'm also reminded of the poker saying: "If you don't know who the sucker is at the table, it's you." Investing in Art, as opposed to buying a work that is personally meaningful to you and worth it by that measure, is gambling. So the above applies.

[joejoegolfn]

07:03 PM on 12/21/2011

After the dot com crash I saw and the dems pushing home ownership in the 90's with subprime loans made me get out of the stock market. When President Clinton repealed Glass-Steagle i got out of banks, bonds and my 401K. I did something all the "EXPERTS" said was stupid. I out everything I had in gold. No diversification, just gold. No more taxes on stocks, bonds, 401ks nothing. Boy was I the joke of my office. Gold was 300 dollars an once and I was going to lose my butt they all said. Who buys 2000 onces of gold? No one they said. I still hear what a bad investment gold is today at 1613.00 and once. YEP I was stupid!!!!!!!!!!!!!!!!!!!!!

[tjdwill02]

08:30 PM on 12/21/2011

So now what's your plan?

[mtnhike1]

06:38 PM on 12/21/2011

The average guy without a lot of investing experience is just out of luck. You listen to the market reports and news. Try to see how a companies balance sheets are going. Then find out that news and markets don't coincide because of the world market being so complex. Balance sheets are lies to make the company appear better than it really is. So, the average investor could put his money in the toilet and flush, would get about the same kind of gains.

[jsujet]

06:53 PM on 12/21/2011

That's the point of difesification.

[jsujet]

06:55 PM on 12/21/2011

Sorry, meant diversification.

[thadea]

06:27 PM on 12/21/2011

"one art, please"

[eulerckt]

05:27 PM on 12/21/2011

I had no idea these guys, collectively, produced enough art for each of us to 'invest' in.

[hmargret]

09:05 PM on 12/21/2011

they didn't.
this more dog and pony show. Circus time.

[johneudicone]

10:10 PM on 12/21/2011

lol

[SoccerFan]

05:26 PM on 12/21/2011

I made a small fortune going long in Utilities this calendar year-

up 18% YTD.

same with double tax exempt muni's.

Owning Long term utilities is such a prudent approach.

[calltoaction]

06:41 PM on 12/21/2011

at 18% you made a small fortune? indeed a phenomenal return in this market, but a small fortune - hardly.

[SoccerFan]

07:38 PM on 12/21/2011

The small fortune would depend upon the amount of principal earning the 18%.

Isn't that right Sparky.

[RefinedGentleman]

05:24 PM on 12/21/2011

I hear that Bevis & Butthead cartoons are a fantastic investment.

[bech5514]

05:23 PM on 12/21/2011

Indeed. Art is a better investment --until it isn't!

[mose joseph workman]

04:49 PM on 12/21/2011

uh-huh. the art world has always made such fantastic claims, but next time you need to turn your art into money, see what happens...

[Eric Jeffrey]

04:46 PM on 12/21/2011

That's why it is so important that we keep the taxes on the wealthy very low -- so that they can invest in art and keep a handful of artists, most of whom are dead, steadily employed. But to be fair, it probably does also create a dozen or so jobs at auction houses.

[joejoegolfn]

06:52 PM on 12/21/2011

How do you figure 55 percent is not fair? How much more do you want? For what the government to tthrow it away on this green energy BS, bail out banks, Subsidize GE? No thank you. The top 1 percent pay more than the bottom 90 percent combined!

[Nardac]

10:23 PM on 12/21/2011

And who in this country pays 55% when the top tax rate is 35%? Must be someone with a very bad accountant! You right wingers are a hoot, making stuff up all the time.

[Liz Pierce]

04:44 PM on 12/21/2011

how can we invest when congress keeps changing the rules, when The Fed is holding interest rates down artificially, and when The Fed is manipulating stock and gold prices, and when our dollar is being printed and diluted, with congress' permission? just wondering?

[rdz69]

05:15 PM on 12/21/2011

True, and in that realm are we any different from China or Russia in their manipulations?

[jrwest78]

05:42 PM on 12/21/2011

the day that we stopped using the gold standard was the day that we started using futures and speculation

[accelerando]

10:40 PM on 12/21/2011

Gold, the sacred metal, valued because it didn't change over time. That's about all it's good for, and nobody much believes it's holy any more. It's only valuable because people think it is. When Spain hauled all that gold back from the New World, it caused ruinous inflation and all they could finally decide to do with it was decorate churches with acres of gold leaf.