Financial planners have long recommended that well-heeled investors buy art to spread their wealth around. In tough times, some advisers are changing that view, unless a buyer is willing to hang on to a piece for a long time.
Like other, less valuable collectibles, artwork comes with its own limitations. You have to secure it. You have to store it. You can't be certain that other rich people will love it when you want to sell it.
A quick review of recent art market indexes show that experts agree that the recent bubble has burst, but that brokers see encouraging signs of recovery.
Even so, a recent study questions the conventional claim on potential returns for art. In general, investors are told to expect returns of about 8 percent a year, which is in line with expected returns from the stock market. But a study that employed a painstaking analysis of public art trades over 56 years questioned conventional claims on potential returns. Luc Renneboog, a Dutch professor of corporate finance, analyzed recorded art trades from 1951 to 2007. He found that art appreciated about 4 percent each year -- far less than other types of investments [source: Heingartner].
Critics of the study say that they judge the success of trades by individual transactions, many of which are private with prices never publicly disclosed.
Clearly, the controversy over the study itself reveals the vagaries of a market that can reward or punish investors at a whim.