Diversifying Your Art Collection Can Offset Financial Risks

How do you build an art collection with value that can withstand the ups and downs of the market? And what role can art play in a collector’s overall strategy to de-risk their wealth? Leading arts economist Clare McAndrew gives insight into the key drivers at work in the last of four segments from her current Christie’s Education course “Art Market Economics,” which are being published on Artsy.

McAndrew is the author of the influential annual report “The Art Market,” published by Art Basel and UBS, and has written multiple books on the international art market and the financial structures that support and drive it. In this film, she looks at the extent to which different sectors of the art market are correlated with the performance of the stock market. She also unpacks how collecting across multiple genres of art, design, and collectibles can help art buyers weather shifts in taste, as well as upheavals in financial markets and the broader economy.

For example, the contemporary art market has a low correlation with the performance of the S&P 500, meaning that stock market swings have historically not occurred at the same time as major moves in the market for contemporary art. This means that owning contemporary art can serve to lower the risk of the full financial portfolio of a collector who also has investments in the stock market.