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Criteria for Investing in the Market of Visual Arts

Received: 11 December 2018     Accepted: 1 November 2019     Published: 4 December 2019
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Abstract

The market for the visual arts carries out a complex activity, which requires identifying key variables to establish valid investment criteria and obtain reasonable profits. This calls for differentiating the purpose of the purchase as either an investment or a collection. Then, focusing on the work and the artist, the trajectory of iconic and emerging elements is investigated and compared to identify the criteria that the buyer should consider when acquiring a piece of visual art. Accurate parameters are needed to invest considering this economic activity has clearly defined segments. For this reason, the claimed characteristics of the artwork, the artist and the market must be assessed as well as the need for the art piece or the added value that an artwork offers to the market and the reason why a certain amount of money must be paid to obtain it. The aim of the present research is to identify key variables to establish valid investment criteria, taking the case of the contemporary Venezuelan Art Market as basis. To achieve this objective, the documentary research methodology was applied and, in addition, interviews with some market agents were carried out, which revealed the presence of many agents with various interests within the market. As a conclusion, the study revealed that the visual arts market is a complex market, which requires different actors to handle accurate and reliable information when making purchasing or sales decisions.

Published in Science Journal of Business and Management (Volume 7, Issue 6)
DOI 10.11648/j.sjbm.20190706.12
Page(s) 140-149
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Art Market, Artwork (Piece), Artist, Collector, Investor, Profits

References
[1] Sherman A and Morrissey C. What Is Art Good for? The Socio-Epistemic Value of Art. Front. Hum. Neurosci. 11: 411. doi: 10.3389/fnhum.2017.00411. 2017.
[2] Artprice. Informe anual. Coleccionar e invertir en arte. 2017. Retrieved from https://www.artprice.com/artprice-reports/the-art-market-in-2017/collecting-and-investing-in-art/.
[3] Artsgain. Art Investment Informative Leaflet. 2018. Retrieved from https://www.artsgain.com/wp-content/uploads/2017/12/Art-Investment-Leaflet-v4.pdf.
[4] Securities and Exchange Commission. Sotheby's annual report. 2017. Retrieved from https://sothebys.gcs-web.com/static-files/3c843441-89db-4556-924a-fcbd6639c74b.
[5] De la Poza Plaza, E. Los activos del mercado del arte como objeto de inversión financiera (Tesis doctoral, Universidad Politécnica de Valencia, España. 2008. Retrieved from http://www.upv.es/pls/soarc/sal_doc_deptesis.Veradj?p_nreg=2818&P_VISTA=&P_IDIOMA=c.
[6] Mei, Jianping; Moses, Michael. The Mei Moses Fine Art Index. 2014 Retrieved from http://www.artasanasset.com/main/artinvesting.php.
[7] Artprice. El mercado del arte Contemporáneo. Informe anual Art Price 2013. Lyon. Retrieved from http://imgpublic.artprice.com/pdf/artprice-contemporary-2012-2013-es.pdf.
[8] Badawi, Halim. Business is business: especulación y mercado en la obra de Óscar Murillo. Esfera Pública.2013. Retrieved from http://esferapublica.org/nfblog/?p=62949.
[9] Song, Sophie. Chinese Painter Zhang Daqian's Works Earned More Than $500 Million In 2011, More Than Works By Pablo Picasso. 2013. Retrieved from http://www.ibtimes.com/chinese-painter-zhang-daqians-works-earned-more-500-million-2011-more-works-pablo-picasso-12863433.
[10] El Universal. Una burbuja con mucho arte. Entrevista a Jason Edward Kaufman. Agencia EFE. Nueva York. 2013. Retrieved from http://www.eluniversal.com/arte-y-entretenimiento/131116/una-burbuja-con-mucho-arte.
[11] Nasdaq Globe Newswire. Sotheby's Reports First Nine Months 2014 Financial Results. 2014. Retrieved from http://globenewswire.com/news-release/2014/11/10/681588/10107251/en/Sotheby-s-Reports-First-Nine-Months-2014-Financial-Results.html#sthash.GulVo rlS.dpu.
[12] Yahoo Finance (a). Bank of America Financial Statemts 2017. 2019- Retrieved from https://finance.yahoo.com/quote/BAC/financials?p=BAC.
[13] Yahoo Finance (b). Sotheby's Financial Statemts 2017. 2019. Retrieved from https://finance.yahoo.com/quote/BID/financials?p=BID.
[14] Deloitte and Artactic. Art & Finance Report 2013. 2014. Retrieved from http://www2.deloitte.com/lu/en/pages/art-finance/articles/art-finance-report.htmlhttp://web.artprice.com/artmarketinsight/759/+Latin+American+Contempora ry+artists?l=en.
[15] Ley del Impuesto Sobre la Renta. Gaceta oficial de la Republica Bolivariana de Venezuela número 38628 del 16 de febrero de 2007. Retrieved from http://declaraciones.seniat.gob.ve/portal/page/portal/MANEJADOR_CONTENIDO_SENIAT/02NORMATIVA_LEGAL/2.4TRIBUTOS_INTERNOS/2.4.02ISLR/2.4.2.html.
[16] Ley del Impuesto al Valor Agregado. Gaceta oficial de la Republica Bolivariana de Venezuela número 38632 del 26 de febrero de 2007. Retrieved from http://declaraciones.seniat.gob.ve/portal/page/portal/MANEJADOR_CONTENIDO_SENIAT/02NORMATIVA_LEGAL/2.4TRIBUTOS_INTERNOS/2.4.03IVA/2.4.3.html.
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  • APA Style

    Elio Amilcar Farfan Torrelles. (2019). Criteria for Investing in the Market of Visual Arts. Science Journal of Business and Management, 7(6), 140-149. https://doi.org/10.11648/j.sjbm.20190706.12

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    ACS Style

    Elio Amilcar Farfan Torrelles. Criteria for Investing in the Market of Visual Arts. Sci. J. Bus. Manag. 2019, 7(6), 140-149. doi: 10.11648/j.sjbm.20190706.12

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    AMA Style

    Elio Amilcar Farfan Torrelles. Criteria for Investing in the Market of Visual Arts. Sci J Bus Manag. 2019;7(6):140-149. doi: 10.11648/j.sjbm.20190706.12

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  • @article{10.11648/j.sjbm.20190706.12,
      author = {Elio Amilcar Farfan Torrelles},
      title = {Criteria for Investing in the Market of Visual Arts},
      journal = {Science Journal of Business and Management},
      volume = {7},
      number = {6},
      pages = {140-149},
      doi = {10.11648/j.sjbm.20190706.12},
      url = {https://doi.org/10.11648/j.sjbm.20190706.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20190706.12},
      abstract = {The market for the visual arts carries out a complex activity, which requires identifying key variables to establish valid investment criteria and obtain reasonable profits. This calls for differentiating the purpose of the purchase as either an investment or a collection. Then, focusing on the work and the artist, the trajectory of iconic and emerging elements is investigated and compared to identify the criteria that the buyer should consider when acquiring a piece of visual art. Accurate parameters are needed to invest considering this economic activity has clearly defined segments. For this reason, the claimed characteristics of the artwork, the artist and the market must be assessed as well as the need for the art piece or the added value that an artwork offers to the market and the reason why a certain amount of money must be paid to obtain it. The aim of the present research is to identify key variables to establish valid investment criteria, taking the case of the contemporary Venezuelan Art Market as basis. To achieve this objective, the documentary research methodology was applied and, in addition, interviews with some market agents were carried out, which revealed the presence of many agents with various interests within the market. As a conclusion, the study revealed that the visual arts market is a complex market, which requires different actors to handle accurate and reliable information when making purchasing or sales decisions.},
     year = {2019}
    }
    

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    AB  - The market for the visual arts carries out a complex activity, which requires identifying key variables to establish valid investment criteria and obtain reasonable profits. This calls for differentiating the purpose of the purchase as either an investment or a collection. Then, focusing on the work and the artist, the trajectory of iconic and emerging elements is investigated and compared to identify the criteria that the buyer should consider when acquiring a piece of visual art. Accurate parameters are needed to invest considering this economic activity has clearly defined segments. For this reason, the claimed characteristics of the artwork, the artist and the market must be assessed as well as the need for the art piece or the added value that an artwork offers to the market and the reason why a certain amount of money must be paid to obtain it. The aim of the present research is to identify key variables to establish valid investment criteria, taking the case of the contemporary Venezuelan Art Market as basis. To achieve this objective, the documentary research methodology was applied and, in addition, interviews with some market agents were carried out, which revealed the presence of many agents with various interests within the market. As a conclusion, the study revealed that the visual arts market is a complex market, which requires different actors to handle accurate and reliable information when making purchasing or sales decisions.
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Author Information
  • Faculty of Económic and Social Sciences, Carabobo′s University, Valencia, Venezuela

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