Inflation Hedge: Is 2022 A Good Year To Buy Black Art?
By Lesley Green-Rennis
- The spring 2022 offering of African American Art at Swann brought $3.6M with an 89% sell-through rate
- Online art sales accounted for 20% of total sales in 2021
After weathering a turbulent 2020, the art market bounced back with a massive recovery last year that seems to be continuing into 2022 with online art sales accounting for 20% of total sales. Recently, an Andy Warhol painting sold at auction for $195 million, the highest price ever for a 20th-century artwork, second only to Jean-Michel Basquiat’s “Untitled” which sold for $110.5 million that was created in 1982. Art markets are thriving despite inflation being at a 40-year high, ailing stocks, and a very shaky cryptocurrency market. Could 2022 be the year for Black art sales to thrive?
Why This Matters: The recent run-up in inflation rates around the world has intensified the search for hedges and art can serve as an inflation hedge in almost any environment, according to The Washington Post. Experts have found that the accumulation of art is an excellent way to diversify one’s portfolio. Unlike bonds, art is a tangible investment that is legible to all and, in general, reliable when it comes to dividends.
The spring 2022 offering of African American Art at Swann brought $3.6 million, with an 89% sell-through rate, highlighting that art still performs well during times of inflation. Furthermore, crypto enthusiasts are being roped into the art world by non-fungible token (NFT) trading. NFT trading has made art collecting an open democratized and diverse market for the first time in history, providing new opportunities for Black artists. The bottom line, across the board is that art markets are alive and well, giving owners the satisfaction of looking at their investments while acquiring durable assets.
Situational Awareness: Over the long run artworks have less price appreciation than equities, buying it will bring more pleasure than holding a lot of losing investments, and no rate of inflation can take that away. Smart buyers who make wise purchases can do especially well. In a climate that makes you feel like you absolutely need to buy something, why not buy Black art that you love to look at?
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