The Art Of Alternative Investment
Monday, January 16, 2012

A new index shows that art is poised to be one of the top alternative investment options for 2012, according to Alternative Asset Analysis (AAA).

The Mei Moses All Art index showed that the art market outperformed the equities market for the second year in a row, with art growing in value over the year by an impressive 11%.

AAA claims that this increase, which is measured through an analysis of the price at which artworks sold in auction houses throughout 2011, shows alternative investments are becoming serious contenders against traditional asset classes.

AAA’s analysis partner, Anthony Johnson explained: “A few years ago, anyone but the super-rich would have overlooked art as a possible way to make cash from investments, but this is all changing, as alternatives become more and more mainstream”.

The main reason for this, says AAA, is because investors have lost faith in traditional asset classes like equities after some turbulent years on the financial markets.

“The average investor may still have a bad taste left in their mouths as a result of the global economic crisis and may well be looking for somewhere less volatile or more ethical and independent to put their cash," Johnson said.

The growth of the art market has also been driven by demand from Chinese investors, who are increasingly splashing their new found wealth on well-known artworks.

AAA supports ethical and alternative investments all over the world, with an emphasis on those that can have a positive impact the environment and communities in developing countries. One example is the forestry investment project run by investment firm Greenwood Management. They offer investors the chance to buy up sections of plantation forests in Brazil that are planted with non-native timber crops that bring in returns once felled and also provide alternatives to timber and charcoal from native species.