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Book Review
‘Everything You Wanted to Know about Investing in Difficult Times’
To state that the global financial world is experiencing an upheaval would be a cliché. Over the last couple of years, we all have been witnessing an intense turmoil, involving stock market crashes, deep recession, a flurry of job losses and inevitable bankruptcies. Many investors have lost precious personal wealth and with it, a semblance of hope as well. The key thing to keep in mind is that with every adversity comes an opportunity!

Here’s a new book that will acquaint you with the wide world of investing opportunities in today’s difficult times. For those who have been caught in the crossfire of the recent economic upheavals, Deepa Venkatraghvan’s ‘Everything You Wanted to Know about Investing in Difficult Times’ informs how you can still emerge a winner.

There’s something in it about different types of asset classes to suit each individual’s temperament and risk taking ability. In this context, it must be noted that recent auctions of Indian Modern & Contemporary Art point to an encouraging change in the scenario. The positive sales figures indicate a rising demand for quality works being picked by genuine collectors. The market is in a stage of consolidation. Liquidity is slowly returning, albeit the mood is still cautious.

If you love art, now is the best time to pick up your favorite painter’s work. The good news is that prices have come down to a reasonable level. It will turn out to be the best investment you’ve ever made a few years down the line. Contemporary Indian art has performed exceedingly well as an asset class over last five to seven years.

And if you still doubt the potential of art as an attractive alternate investing avenue, the piece of statistics will make you rethink. The numbers can leave you totally surprised, as the author points out: When gold gave a return of 24.6 percent and shares, 46.7 percent, art gave a whopping 154.8 per cent, during the same period of time for which the study was carried out.

However, this does not mean that investing in art is a straightforward task. As rightly pointed out, this is only one side of the story! “Importantly, these returns reflect the work of certain top artists. Like in the stock markets, where mid-caps can outperform large caps, in the art market as well, the work of junior artists could fetch higher returns as they may be bought for a cheaper price,” is the precious piece of advice.

“When buying art, stick to renowned artists, particularly if you tend to be risk averse,” the author counsels. “For an artist’s work to command exceptional prices in the market, it’s important that he or she be consistent with good work over a prolonged period of time.” Then there’s a word of caution about the transaction costs. “You’ve to pay a 15-20 per cent commission when you acquire a piece of work. When you sell, you might have to pay commission again. This cost has to be factored in when thinking to invest in art.

From an individual investor’s perspective, art funds can be better option for the purpose of diversification. However, keep in mind the fact that like most other investment avenues their overall performance depends on various factors, including the broad economic parameters. The art market is not recession proof and it does get affected by economic recession. There exists a correlation between the art market and the financial market. Of late, the latter has been on a recovery path and the optimism is getting reflected in art sales. When they get a good opportunity to buy a quality work, buyers are willing to pay.

There are many such finer points that the book touches upon, providing an insight into the ‘art of investing’. Those who have suffered in the recent market crashes can take heart from the words of wisdom ‘Everything You Wanted to Know about Investing in Difficult Times’ has to offer. And for wary first timers, the book will serve as a handy guide.

Welcome to the beautiful world of art. If you want to gain from it, start investing now!