Do Art Auction Houses Camouflage Results? – artmarketblog.com

Do Art Auction Houses Camouflage Results? – artmarketblog.com

I received an email on December 2nd from one of Australia’s leading art auction houses, Menzies Art Brands, with the subject ‘Defamation Alleged’. The email read:

DEFAMATION ALLEGED

Menzies would like to bring to your attention this story on Page 10 of The Age newspaper today:

LEADING art auctioneer Rod Menzies has described as ”scurrilous” allegations made by Robert Le Tet and Rick Anderson about his business practices, in The Age yesterday.

Mr Menzies, an entrepreneur, cleaning business tycoon and owner of Menzies Art Brands, said he ”always honoured every deal” and was ”well known for carrying out every commitment and for his integrity”.

He said he observed the ”highest ethical standards” and denied suggestions to the contrary. He said in a statement that he had instructed his lawyers to start proceedings for defamation and damages claiming $38 million.

Enquiries
sydney@menziesartbrands.com

Before we continue, this is not the first time that allegations have been made regarding Menzies’ business practices. In 2008 complaints were made by other auction houses in Australia regarding Menzies’ alleged failure to adequately disclose details regarding guarantees provided by Menzies, as well as details regarding works being sold by Menzies that Menzies either owned or had a share in. Menzies denied the charges which were dropped in March of this year by the Australian Competition and Consumer Commission.

This time around, Menzies is being accused of misleading reporting of art sales through his auction house. The accusations were aired in the Melbourne, Australia based newspaper ‘The Age’ where details of a transaction involving a painting by Brett Whiteley, one of Australia’s most famous and valuable artists, were questioned. According to The Age, the painting in question was reported by Menzies Art Brands as having been sold in Sydney on the 25th of March for A$1.44 million. Apparently, however, only two months later Mr. Menzies was offering the painting in question for sale privately through his company for A$1.25 million, which suggests that it wasn’t sold at all. It is then alleged that Mr. Menzies struck a deal with a collector, named as a Mr. Anderson, to swap the Whiteley painting, and another painting, for two paintings owned by the collector. The swap apparently took place in June of this year.

If this allegation wasn’t enough, ‘The Age’ alleges further issues regarding ownership of the Whiteley painting. Apparently a Melbourne financier launched a court case to retrieve the Whiteley painting, which he claims he owns because his company, Questco Pty Ltd. , loaned money to an art dealer to purchase the Whiteley painting – a dealer who is now having financial difficulties. The Melbourne financier apparently then asked Menzies to sell the painting through private treaty for A$1.25 million, but Menzies reneged on the deal a short time later. Menzies is being accused of then returning the painting to the dealer, not the financier, and purchasing it off the dealer for A$850,000. Mr. Menzies then put the painting up for sale in March of this year, which is where this story began. Menzies sought to retrieve the painting from Mr. Anderson whom he sold the painting to by private treaty and apparently even offered several other paintings in exchange which had also been reported as having been sold at auction. Mr. Anderson has so far declined to return the painting.

According to the article in ‘The Age’:

Mr Anderson claimed Mr Menzies has been ”ramping” up the art auction market, and he said it was in the public interest to know how the prominent auctioneer operated: ”He reported the Whiteley painting as sold and then he offered it to me for $200,000 less than what it was supposedly sold for at auction,”.

No charges have been laid against Mr. Menzies or his company and, as you can see from the email I was sent, Mr. Menzies strongly denies the allegations made against him and his company. The question of who is telling the truth will presumably come to light if the defamation case goes ahead.

The reason that I have alerted you to this case is that I have been on a bit of an art auction house crusade of late in an attempt to inform the public about what goes on behind the scenes and hopefully encourage the art auction houses to be more transparent and ethical with their dealings. With transparency being one of the biggest issues, I thought it was important to highlight this case even though none of the allegations have been confirmed as being true.  I will be doing a series on this issue as there are lots of allegations to cover.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

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2010 Art Market Status Report – 2nd half – artmarketblog.com

2010 Art Market Status Report – 2nd half – artmarketblog.com

The art market has found its self in a rather interesting predicament.  On the one hand, confidence in the art market has increased considerably since the beginning of the year.  On the other hand, the ever increasing likelihood of a major financial crisis has seen more cautious and selective buying.  Adding to the drama is the increasingly obvious lack of top quality paintings by the Old Masters, which the market is currently showing a very healthy appetite for.

On the 13th of July an impression of Edvard Munch’s controversial work Madonna sold for an amazing £1,252,000 at Bonhams – twice its lower estimate of £500,000. This makes it the most expensive print ever sold in the UK and the second most expensive print in the world. At Bonham’s 19th Century Paintings sale held on the 22nd Apr 2010, ‘Female figure study’ , a drawing on paper by John Constable with a hidden history, sold for four times it pre-sale estimate to make £24,000. Also achieving success was an interesting  ‘Portrait of a Gentleman’ by George Dawe (British 1781-1829) which was the subject of fiercely competitive bidding and finally sold for £43,200 against a pre-sale estimate of £4,000-6,000.

At Christie’s Victorian & British Impressionist Pictures Including Drawings & Watercolours sale on the 16th of June,  Sir George Clausen’s ‘Head of a young girl (Rose Grimsdale)’ made £505,250 against an estimate of 250,000 – 350,000 setting a new world auction record for a work on paper by the artist. The same sale also saw a new record for Archibald Thorburn with yet another work on paper titled ‘Grouse in flight’ which made £217,250 against an estimate of 60,000 – 80,000

At Christie’s 23 June 2010 auction of Impressionist and Modern Art the top price was achieved by ‘Portrait of Angel Fernández de Soto’, 1903, a Blue Period masterpiece by Pablo Picasso (1881-1973), which sold for £34,761,250 against an estimate of 30,000,000 – 40,000,000.  Another portrait titled ‘Frauenbildnis (Portrait of Ria Munk III)’, one of the last great female portraits painted by Gustav Klimt (1862-1918), sold for £18,801,250 against an estimate of £14 million to £18 million.

Yet more portraits achieved high prices at Christie’s Old Masters & 19th Century Art sale held on the 9th of July at their South Kensington saleroom. Margaret Sarah Carpenter’s ‘Portrait of a young girl’, who is thought to be Henrietta Carpenter, reached £32,450 against an estimate of 7,000-10,000 and achieved a new world record price for the artist at auction. A work from the Studio of Sir Peter Lely titled ‘Portrait of King Charles II’ also fetched £32,450 against an estimate of 6,000-8,000.

Over at Sotheby’s the ‘An Exceptional Eye: A Private British Collection’ sale held on the 14th of July saw a watercolour over pencil by John Robert Cozens titled ‘The Lake of Albano and Castel Gandolfo’ reach £2,393,250 against an estimate of 500,000 ‐ 700,000 –  the top price of the sale and a new record for the artist at auction.  The portrait miniatures performed particularly well with the Sotheby’s press release stating that “a very high price achieved for an early work by John Smart (lot 17, £56,450), and a record for a work by Bernard Lens (lot 10, Portrait of King Charles I, sold for £58,850)”

At Sotheby’s Impressionist & Modern Art Evening Sale held on the 22nd of June, the top price paid was again for a portrait.  Edouard Manet’s ‘Portrait de Manet par lui-même, en buste (Manet à la palette)’ fetched £22,441,250 against an estimate of £20,000,000-30,000,000 –  a record for the artist at auction. The top-selling lot of the June Russian Paintings Day Sale was Boris Grigoriev’s oil on canvas Portrait of the artist’s son, Kirill, which sold for the sum of £253,250, above its high estimate of £200,000.  Another portrait, Alexander Evgenievich Yakovlev’s ‘Titi and Naranghe, Daughters of Chief Eki Bondo’, took top spot at the 7 June Important Russian Art Sale selling for £2,505,250 – more than triple the £700,000 – 900,000 estimate .  Sotheby’s sale of the long-lost art trove of Ambroise Vollard saw more records set for works on paper held in Paris on the 29th of June. According to the Sotheby’s press release from the sale: “Key works among the highlights of the group were an extremely fine impression of Picasso’s celebrated 1904 etching ‘Le Repas frugal’ (another portrait), which more than doubled its high estimate of €300,000 to bring €720,750 (£584,078), the highest price of the sale. A monotype by Edgar Degas, ‘La Fête de la patronne’, circa 1878-79 soared past pre-sale estimates (€200,000-300,000) to bring €516,750. Paul Gauguin’s ‘Trois Têtes Tahitiennes ‘sold for €312,750 (£253,445) well above the estimate of €100,000 to €150,000 and a record was set for a print by Pierre-Auguste Renoir when ‘Le Chapeau Epinglé, Deuxième Planche’ more than tripled its high estimate of €80,000 to bring €252,750 (£204,822). Man Ray’s ‘Autoportrait solarié’ fetched €168,750 ($206,138)”

On the 2nd of June at Sotheby’s in London, in the sale of 19th Century European Paintings, one of the finest figure paintings by Jean-Baptiste-Camille Corot ever to have appeared on the market was purchased by the Musée d’Art et d’Histoire in Geneva for £1,609,250, exceeding its pre-sale high estimate of £1.2 million.  According to Sotheby’s “‘Jeune femme à la fontaine’ enjoyed an exceptional early provenance before it was requisitioned during the Nazi period, and was recently restituted to the heirs of its erstwhile owners.”

The results that I have highlighted above give a good indication of the current market sentiment and the market trends that are likely to define the market for the near future.  To start with, the popularity of portraits is a major indication that buyers are seeking the safety of the academic and the scholarly.  With portraits in particular, the level of skill and talent of the artist is pretty much immediately obvious to even the most untrained eye. When it comes to fine art, and portraits in particular, I do not think that people use the term craftsmanship to describe the work carried out by some artists.  To accurately portray the physical attributes and the personality of the sitter is, in my opinion, a craft that requires skill, training and a healthy dose of talent.  When one adds the historical value and importance of portraiture, the appeal of a famous (or not so famous) face from history to an investor becomes even more apparent.

I have spoken about the concept of fine art as a form of currency in previous posts.  If ever there was a type of art that was more suited to being used as a form of currency, it would have to be portraiture.   The number of common features that most portraits share, combined with the ease with which one can judge and value a portrait based on intrinsic and extrinsic characteristics, makes the portrait a prime candidate for an art world currency.  As I have said before, scholarship is the key to successful art investment, and successful wealth preservation using art for that matter.  Portraits are usually afforded the honour of in depth scrutiny and attention by scholars and academics because of the information that portraits can provide about various branches of history.  For this reason, among others, portraits are given the sort of long term continued attention that constantly adds value.

The second trend that I have alluded to is a greater interest in works on paper – in particular original drawings and watercolours.  I personally of the opinion that the increased popularity of watercolour paintings, particularly those by British artists, is due to the greater interest in the art of the Victorian era which was the golden age of British watercolour painting. Although original works on paper, such as drawings and watercolours, are often looked upon as the less valuable mediums in the scheme of things, the tide can change very quickly as it has recently.  As well as the revival of interest in Victorian art, a shortage of major works by the Old Masters and the Impressionists has driven buyers to seek the qualities that they are looking for in other mediums and periods. An article titled ‘Young masters in an old game’ from The Guardian newspaper written by John Windsor in November 2009 sums up the situation surrounding works on paper perfectly with the following statement: “Taste is shifting from new, ill-conceived conceptual art of the Brit-pack variety – costing thousands but faltering at auction, towards old, traditional skill-based art……. but you do need to develop an eye for quality – the easy, confident line of a master draughtsman, the luminosity of a watercolourist’s washes.” It is a shame that the watercolour painting is considered the poorer cousin of the oil painting because there are so many amazing watercolours by some of the world’s greatest artists that do not receive the exposure that they deserve.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

Network of Arts and Culture Websites Creates New Model for Online Publishing – artmarketblog.com

For Immediate Release

Contact: Brigid Brown, Publicist

Cell) 551.358.1058

brigidbrown13@yahoo.com

Network of Arts and Culture Websites Creates New Model for Online Publishing

“Life in the arts has taught (Kathryn) Born that you can’t have a life in the arts unless you’re ‘able to work for free or almost nothing.’ She thinks that’s wrong … “

Chicago Reader, January 2010

The network of websites that comprise Chicago Art Map and Chicago Art Magazine are not simply local websites but a case study for a new model of online publishing.

See: http://chicagoartmagazine.com/transparency-pages/

“Print media is in a mindset that online publishing is simply posting on a screen rather than printing on paper,” says Kathryn Born, founder of the CAM. “It’s rarely utilizing the internet’s capabilities to connecting the story ancillary data and deeper pools of information. It doesn’t harness the power of online distributions, which can categorize and deliver content to the audience — in the exact moment and form they wish to receive it.”

What does that have to do with Chicago Art Map? The network stands as a proof-of-concept of new publishing through several scenarios.  The key example is that Chicago has 300 art venues and countless events every week. Comprehensive lists are ideal, but unwieldy.

The answer? Put all the information into a database instead of a list. Put a Google Map layer on top, add images, and code additional software tools so the events can be sorted and filtered.

The result? Search an art map by geographical range or  exhibit type (a museum vs. a gallery or alternative art space) or type of art or type of event. Sort alphabetically or by neighborhood,   location, specialty and filtered by date and geography.

For Chicago Art Magazine, footnotes are back in style using “hovering” tools, paragraphs of extra information expand with a click to instantly reveals more information (without refreshing the page).   And images! Since ink is no longer a cost factor, they’re abundant, and expand to full size when clicked upon.

Chicago Art Magazine doesn’t publish monthly, it publishes twice a day. Each piece is pushed out to over 5,000 Facebook and Twitter followers.

It’s operational budget, for what would-be a 200 page magazine, is only $1,700 a month. Every dime goes to writers, editors and staff. No rent, no paper, no trucks. Suddenly, an advertising-based model that only requires $2000 per month to support freelancers and stay in the black, is attainable, often with sole-sponsorship deals that provide a blast of coverage for only a few sponsors each month.

“‘Advertorial; content is permissible, but only if it’s fully disclosed in every instance,” is the policy of the magazine, as they are supported with “sponsored posts” along with graphic advertisements.

Most unusual, yet still in accordance with the Open source (software) background that prepared Kathryn Born for the task, is the idea of freely sharing ideas so that others can build upon what was learned. A tab called “transparency” reveals everything from tech tricks, to philosophy and budgets. A weekly blog gets into even smaller details about editorial and survival

-MORE-

The site speaks to all tiers of art fans whether a seasoned collector or a newbie looking to go out on a Friday evening. This breadth of reviews is credited to the aptly named “Friday Night Army” which is a team of critics, released onto the city, with the mission to report back on what is seen and heard in their own voice. “The editorial goal is to write about art in a simple, lively way, using pictures, video and audio,” says Born. “Our belief is that writing about art can be a literary style that’s as colorful as the art we describe.”

Chicago Art Magazine ~ Reviews & Features

Chicago Art Map ~ One-Stop-Shop Gallery Finder

The Chicago Art Machine speaks to all tiers of art fans whether it is a collector on the prowl for the latest discovery or a newbie looking to branch out. This breadth can be credited to the aptly named “Friday Night Army” which is a team of critics, released onto the city, with the mission to report back on what is seen and heard in their own voice.

Some features are more mainstream like, “The Bath Haus of Gaga” and others more niche-y but still accessible such as, “A Crash of Critters at Fill in the Blank”. No matter what genre, each article is informative and as a whole the network feels like a mini-course in art history. After a short time of perusing the sites, visitors will walk away knowing way more than when they started.

“The editorial goal is to write about art in a simple, lively way with a whole bunch of pictures, video and audio,” says Born. “The belief is that writing about art can be a literary style that’s as colorful as the art we describe.”

Kathryn Born is the Editor-in-Chief of the online Chicago Art Magazine and oversees ChicagoArtMap.com. Born breaking off to start her own network of sites, Born had created the blog Art Talk Chicago for the Chicago Tribune-sponsored network of blogs called ChicagoNow.com.

If you plan to run a review and/or would like to set up an interview with Kathryn Born, please contact: Brigid Brown @ 551.358.1058 or brigidbrown13@yahoo.com

Visit us online at: www.chicagoartmagazine.com

-END-

The Reality of Feb 09 Art Auctions – artmarketblog.com

The Reality of Feb 09 Art Auctions – artmarketblog.com

christies1The first round of major art auctions for 09 have proven that there is still a considerable amount of money available to be spent on top quality and rare works of art provided the price is right. Fresh works from private collections appeared to be particularly sought after, a sign that solid and extensive provenance continues to be a big draw card. Even some of the less impressive works were eagerly fought over which suggests that the low prices and the excitement of the year’s first major auctions may have induced a bit of over-enthusiasm. The conservative estimates gave buyers plenty of reason to open their wallets and the smaller sales encouraged healthy competition for the top works.

Christie’s Impressionist and Modern Art Evening Sale was the most impressive sale realising a total of £63,428,750 / $91,210,543 / €70,088,769 with 83% sold by lot and 88% by value. Sotheby’s Impressionist and Modern Art Evening Sale wasn’t quite as successful as Christie’s bringing in a total of £32.6 million with 76% sold by lot and 68% by value. Sotheby’s failure to mention the sold by value percentage of their evening sale even though they did mention the sold by lot percentage suggests that they weren’t quite as impressed with their results as Christie’s were.

With the Impressionist and Modern Art Day Sales, Sotheby’s trumped Christie’s with the sold by lot and sold by value percentages but Christie’s sale total was higher than that of Sotheby’s. Christie’s sold £14,131,975 / $20,307,648 / €15,841,944 work of works with a 76% sold by lot percentage and an 81% sold by value percentage where as Sotheby’s sold £11,292,825 / $16,179,230 / €12,687,503 work of work with 83% sold by lot and 90% sold by value.

The figures look impressive considering the events of the past six months but were the auctions really as successful as the figures suggest?. In short, no. And here’s why. First of all, Christie’s 2008 Impressionist and Modern Art Evening Sale realised £105,372,000 which is considerably more than the £63,428,750 taken at this years sale. Sotheby’s 09 Impressionist and Modern Art Evening Sale faired even worse when compared with their 08 sale which realised £117 million pounds, more than three times what the 09 sale achieved. Yes, the sales were much smaller, but the auction houses conducted smaller sales because there is not as much money available to be spent on art and the buyers are much more discerning. A smaller sale means that there are less works to fight over thus increasing the chance that the chance that the bidding will be far more competitive. Low estimates provided even more encouragement for bidders to get involved and, as I am sure many of you know, once you get involved in a bidding competition with someone else you don’t want to come out the loser.

Had this years sales had the same number of works and the same estimates it is unlikely that the results would have been as good as they were. Because of this, the only way that they true state of the art market could have been measured using these auctions was if the circumstances (auction size, estimates) were the same as they were the previous year. Sold by lot percentages and sold by value percentages are easily manipulated by the auction houses using the tactics that I have mentioned above. What can’t be manipulated by the auction houses is the total number of people that are willing and able to spend money on art and the total dollar value that they are able to spend. The success of a business such as Sotheby’s is determined by the dollar amount of profit that they make. Common sense would suggest that the dollar amount of profit that Sotheby’s and Christie’s made from their significantly smaller auctions would be far less than the dollar amount of profit they made in the much larger sales of 2008. Adjusting to the conditions to achieve results that appear to be positive is not the same as achieving a positive result.

To be continued…….

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

Specialist Sales Entice Art Buyers – artmarketblog.com

Specialist Sales Entice Art Buyers – artmarketblog.com

cataloguesDuring times of crisis, art auction houses tend to get creative and start looking at new ways of encouraging sellers and enticing buyers. One of the tactics that the auction houses use to try and generate new business is to create new sale categories and types of specialist sales. Most importantly, specialist sales allow auction houses to take advantage of emerging markets and target specialist collectors. When work from a particular movement, of a particular medium or from a particular country appears to be in strong demand, it would make sense that an auction house would make an effort to target that niche and it’s collectors. If the auction house had not held a specialist sale of work from that particular movement, medium or country it would seem quite logical that the first step in taking advantage of that niche would be to hold a specialist sale.

History has shown that an art market correction encourages the dedicated collectors who were priced out of the market during the boom by the speculators to re-enter the market. It is also quite likely that there new collectors will be entering the market as well who have also been encouraged by the reduction in prices. Holding specialist sales is a way of catering to the specific needs of those collectors and developing new client relationships. New sale categories are also bound to generate buzz and attract attention which is particularly useful for an art auction house during an art market correction.

As shifts in buying patterns take place it is crucial for auction houses to be aware of those shifts and to take appropriate action to cater for those shifts. Time is of the essence when it comes to the art market especially in the current market where the trends and buying patterns seem to change at a continually increasing pace. Auction houses are already beginning to make efforts to take advantage of buying trends by adding new sale categories such as the Contemporary Turkish Art sale that is being held by Sotheby’s in March.

To be continued………

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

An Important Message for Art Buyers – artmarketblog.com

An Important Message for Art Buyers – artmarketblog.com

buying-artIf you take a close look at the available data, information, opinions, analysis and reviews that relate to the art market you will find that a very large majority come from art market professionals. The same art market professionals whose livelihood depends on the ability to profit from the sale of art. Very little of what you read about the art market contains any sort of reference to the sentiment of art buyers which is rather unfortunate considering it is the buyers who ultimately decide the fate of the market. Because the primary sources that the media use for the articles that they publish on the art market are art market professionals, the majority of what is currently being written about the art market has a decidedly negative tone. This is obviously due to the fact that the art market professionals who rely on the ability to profit from the sale of art have been hit hard by the financial crisis. Buyers, on the other hand, stand to benefit greatly from the reduction in prices yet there are very few column inches dedicated to this, and other positive effects of the art market correction.

Although it is true that the value of works purchased prior to the correction may decline there is the question of what, if any, effects this will have on the buyers which I will address later on. There is no doubt that the lack of positive press is partly because doom and gloom attracts far more readers and also because those in the industry are far easier to obtain information and opinions from than the buyers. So what is the current state of play for art buyers I hear you ask. Well, to fully understand the current state of the art market from a buyers point of view one needs to first take a look at the different types of art buyers and their motives. The reason that the different types of buyers are important is because not all art buyers are motivated by the same things, have the same attitude towards art buying or are affected by market fluctuations in the same way. In my opinion there are five distinctively different types of art buyers (excluding dealers) which are:

Collectors: True art collectors are usually middle class professionals who have a passion for art that is accompanied by an interest in a specific period, era, movement, theme etc. The motivation for wanting to build a collection varies from collector to collector and will usually have very little, if anything, to do with financial gain. Most collectors have a specific goal that helps determine the progression of the collection. Because a true art collector invests so much time and effort into the creation of an art collection it is quite likely that they will never sell the collection but will instead donate the collection to a museum or other institution where the collection can be preserved and remain intact.

Decorators: A decorator decides buy an artwork based on aesthetic appeal and also whether the work will complement the decor of the intended location of the work. The future value of the work is unlikely to be of any great concern to the decorator.

Investors: A true investor has a long term strategy that takes into account the fact that fluctuations on the value of works in their portfolio are almost guaranteed. An investor’s portfolio should include a diverse range of works that spreads the risk so that a reduction in market value of a particular medium, artist, movement etc. doesn’t affect the investor’s whole portfolio. It is also recommended that are should make up no more than 10 percent of the value of an investment portfolio so that the whole portfolio isn’t affected by the negative movements of one particular market. Smaller gains over a longer period of time is the aim of the true investor with the average required holding period for an investment portfolio being 5-7 years. A longer holding period may be required if the market experiences a downturn but the true investor is unlikely to find themselves in a position where they have to sell their art while the market is experiencing a downturn.

Opportunists (speculators): Opportunists take advantage of a hyper-inflated art market that offers the potential for easy short term financial gain achieved by “flipping” works of art. Opportunists are only interested in the financial gain that can be achieved during the height of an art market boom and will retreat from the art market and stop buying and selling art once the ability to make fast easy profits no longer exists.

Egotists: Interested in impressing other people in their socio-economic circle by purchasing expensive works of art by the world’s top artists. Egotists are motivated by a desire to outdo the other art buying egotists and a desire to acquire trophies that show off how wealth they are.

Having excluded dealers and other people whose livelihood relies on the art market it becomes quite clear that an art market correction is not going to have that much of an effect on those people who are buying art. From the analysis of the different types of art buyers above we can see that:
-collectors are not focused on financial gain and unlikely to want to sell works from their collection
-decorators are not concerned with financial gain
-opportunists usually exit the market once the potential for quick easy profits disappears
-investors have a long term strategy and can ride out the downturn
-egotists are likely to be extremely wealthy individuals who will not be affected by the reduction in market value of their works as they only bought them as trophies. The biggest concern for the egotists is whether the reduction in market value of their trophy artwork has an effect on it’s ability to induce jealousy, envy or admiration from others.

The only people that the art market correction is likely to have a major effect in the short term on are those that are forced to sell to cover debt or because of financial hardship. In the long term there may be some investors who experience a permanent reduction in the value of one or some works in their portfolio but a well structured portfolio should include a range of works to spread the risk and avoid a more widespread permanent reduction in portfolio value. What is most important to recognise is that art buyers actually stand to benefit from the art market correction because of the inevitable lowering of prices. Collectors that have previously been priced out of the market by speculators will be able now re-enter the market and take advantage of the reduced prices to fill gaps in their collection. Investors will have the opportunity to add to their portfolios and all the decorators can get better value for money.

The reason that I wrote this post is because a large majority of information and data that is published about the art market is geared towards the art market professionals who live off the art market. All the doom and gloom that the art dealers are promoting can have a negative effect on all the other art buyers that I have discussed in the post who are not relying on the art market to make a living. I wanted to show that the art market correction is actually not such a bad thing and can actually be a positive thing for those that don’t have to make a profit from the sale of art to put food on the table. What art buyers should be doing is embracing the art market correction and taking advantage of the lower prices because the lower prices won’t last forever.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.