Valuing Art – How an Art Price Index Could Change Everything !!!

By On September 25, 2007 · 18 Comments

Valuing Art – How an Art Price Index Could Change Everything !!!

One of the reasons that more people don’t invest in art is the lack of a means of measuring the value of their investment on a day to day basis like you can with shares. As the old saying goes, “knowledge is power” which means that a lack of knowledge equals a lack of power and a lack of power equals a lack of control. Investors tend to associate the level of control they have over their investment with how asx Valuing Art How an Art Price Index Could Change Everything !!!secure their money is because a high level of control would allow the investor to quickly react to an event that is causing a reduction in the value of their investment thereby minimising the negative effects. Because most people are extremely selective and cautious when it comes to investing their money, the level of control that people have over their money is a crucial deciding factor when it comes to deciding what their money will be invested in which is why the stock market is such a popular option.

Because of the nature of the art market there has not been a successful attempt as yet to produce an index that would allow people to sufficiently measure the “health” of their investment on a regular basis so those that do invest in art are relying on the factors that determine an increase in value in the long term as opposed to those that determine an increase in value in the short term.

Imagine for a moment that a price index was able to be created for each individual artist that constantly tracked the value of their work (or shares in art) and that there was a way of instantly trading works of art (or shares in art) in real time. The way people approached the art market, the way art was bought and sold and the factors that determine the price people are willing to pay for an artwork would be completely changed if such an index were available. Auction houses and galleries would most likely become obsolete with art brokers taking their place as representatives for artists and service providers for investors. Although such an index would solve the problems of determining value it would also cause most of the advantages of art investment such as the stability, potential for growth, value of the asset etc. to disappear thus probably rendering the whole art market obsolete.

The above scenario will obviously never eventuate (thank goodness) but it does highlight the need for everyone involved in the art world to carefully consider what effect their actions are having on the art market especially when the art market is experiencing such growth.

nice nick Valuing Art How an Art Price Index Could Change Everything !!!**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

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  • http://sebastiantedesco.blogspot.com sebastian tedesco

    Why do you think that such a index is never going to exist?

  • http://www.artforprofits.com artforprofits

    Sebastian,

    Thank-you for your question. The reason there will never be an index such as the one I mentioned in the above post is because of the huge number of variables that effect the value of art may of which are subjective and therefore not measurable.

    Nicholas Forrest
    artmarketblog.com

  • http://balmorg.wordpress.com/ balm

    interesting read. how do you approach art value?

  • http://www.duncanchatwin.com Jo Small

    what comments do you have about the large prices some artists are asking for their work eg Duncan Chatwin

  • http://sebastiantedesco.blogspot.com sebastian tedesco

    Nick, thank you for your answer. I want to congratulate you for your blog. it is one of my favorite readings!
    I just published your link n my own blog!

  • http://www.artforprofits.com artforprofits

    Dear Jo,
    Thankyou for your question. Duncan Chatwin is an established artist who has a excellent feel and understanding for the relationship between form and colour that gives his work an almost mesmerising quality. Because of his experience and talent I think that Duncan Chatwin should be asking a decent amount for his work although in the scheme of things he is still in the early to mid stages of his career so his prices should reflect this. The danger of over-pricing work is that you can alienate potential customers which I am sure Duncan is aware of so I am sure his prices are an accurate reflection of the value of his work.

    Nicholas Forrest
    artmarketblog.com

  • Nick

    I am not sure why you guys are speaking of Duncan Chatwin in a positive light when he is wanted by the police in Sydney for Fraud. He and his wife Fran has taken millions of dollars from investors who has invested in his paintings and they have now disappeared.

  • Anonymous

    Anyone else have any information on Duncan and Fran? I am stunned to hear that they are wanted by the police.

  • Steve

    Fortunately the rumor Nick wants to spread is not true. I just spoke to Duncan and he said that the next Saturday after he read your blog, he went to the Sydney police department. The all had somewhat of a laugh because they had no interest in him, no wants no warrants. Its funny how people start rumors, isn’t it? And he and Fran have not disappeared. I just talked to him on the same phone number I’ve had for him for years.

    • Anonymous

      Maybe Duncan would like to explain how he swindled thousands of dollars from people for his paintings.

  • Shivnesh Chandra

    As Duncan Chatwins representative… i wish to inform you that after 2 years of break, Mr Duncan Chatwin is finally selling his paintings again. Contact me if anyone is interested in purchasing true art made by an icon in the art world….many has described him as the Australian Picasso

    • Seamus O’Brien

      Hello Shivnesh, I am glad Duncan is doing well. Can you ask him to get in touch with me please. Thank you. Seamus O’Brien 0414 241010

  • Shivnesh Chandra

    Yeah Seamus…im seein him tomorrow…i will give him your number =)

    • brita

      The fact that Duncan Willem Chatwin was declared bankrupt on 30 July 2008 is public information. So is the fact that he owed $1,078,515.86 is public information.
      His bankruptcy Number is
      NSW 5932/8/2 (a52) estate 1
      The fact that these creditors have not been paid is also public information.
      It is highly irresponsible to publish any information that gives him credit such as soliciting for potential buyers of his works.

  • michael smallman

    I am glad to here Duncan and Fran are doing well and his paintings are now back on he market. Does this mean I mght get some money back on my long lost investment ? If you have any questions you can email me.

    • Adrian

      Im in the same vote and lost several thousand dollars.

      I think it would be nice if Duncan actually got back in contact with all of his previous investors to tell them what happened. I tried multiple times and i have not been able to reach him.

  • Anonymous

    I lost $20,000 NZ dollars , not including many thousands in interest payments which didn’t eventuate.
    Haven’t heard a word from Duncan or Fran.

  • brita

    The fact that Duncan Willem Chatwin was declared bankrupt on 30 July 2008 is public information. So is the fact that he owed $1,078,515.86 is public information.

    His bankruptcy Number is
    NSW 5932/8/2 (a52) estate 1

    The fact that these creditors have not been paid is also public information.

    It is highly irresponsible to publish any information that gives him credit such as soliciting for potential buyers of his works.

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