Start buying art instead.
That’s been the strategy of the world’s wealthiest investors during times of economic uncertainty stretching back to World War II, CNNMoney reports. It turns out that investing in the art market has a number of perks that financial markets don’t.
Since the value of fine art tends to appreciate, it's an investment that can offer consistently high returns. As a result, art has often outperformed stocks over the last decade for the wealthy, according to CNNMoney. The idea has been backed by hedge fund manager and author James Rickards, who wrote in U.S. News & Daily Report that "the basic idea that... art outlast[s] and outperform[s] riskier assets such as stocks, bonds, and cash seems sound when viewed from the perspective of centuries."
Indeed, the amount international investors are willing to pay for art is a testament to its value around the world. China surpassed the U.S. to become the world’s largest market for art and antiques this year with a 30 percent share in the global market that's estimated to be worth about $60 billion in 2011, according to a March report by The European Fine Art Fair. Earlier this year, the royal family of Qatar made the most expensive art transaction in history by buying Paul Cézanne's "The Card Players" for $250 million.
And the purchases may only get bigger. Experts expect 2012 to be a big year for the art world with several famous works up for sale. Most notably, Edvard Munch’s iconic painting “The Scream” is being offered at auction by Sotheby’s Wednesday for an estimated $80 million.
Check out CNNMoney's video "Why the 1% loves Picasso" below:
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