BENEFITS OF ART AS THE ALTERNATIVE ASSET CLASS
Objectives that any investor would take into consideration when making any investment.
Capital Gain / Capital Growth – Art is an asset class that has significant capital gain/ capital appreciation in the medium to long term.
Hard currency value – the fact that African art is traded in London, New York and Paris, gives African art a hard currency value i.e. Dollar, Pound, Euro. / Wherever art is sold in the world all art is converted to hard currency.
No Capital Gains Tax – the tax benefits of art are so significant that the capital growth is a nett gain as opposed to equities and property which have significant tax implications on dividends, rental income and capital growth. Art is subject to no capital gains tax if held as personal effects, conditional that you are not a registered trader in art.
Movability / Portability – this is an important aspect if one considers what happened in the Second World War when Europe was invaded by the Nazis, in many instances people were forced to abandon their homes and obviously their equity portfolios and gathered their ‘movables’, i.e. art, to give them a start elsewhere in the world.
Transferability – art has the benefit of transferring ownership quite easily without any legislative implications.
Consumer Price Inflation (CPI) – art far outperforms the CPI as well as various other local and international asset classes.
Supply and Demand – To invest in an asset class where demand exceeds supply (the most important rule of economics).
Inflation – art is an asset class which ensures preservation of capital as it combats the erosive powers of inflation.
Estate duty – art has significant estate duty benefits.
Privacy – the privacy and confidentiality of ownership are of great importance. With both property and equities, these have title deeds and share certificates, and with this, ownership information is freely available in the public domain.
Pleasure – as a passionate collector, you have the pleasure of enjoying the philosophical, intellectual, emotional and physical properties and energy field that art affords one.
Bear in mind that “art exists only in a civilised society” because art reflects a moment in time which embodies exactly where that country was in terms of the lay of the land, the light, the economics, the politics, the culture, the visual readability which ultimately renders itself in the “enjoyed aesthetic”.