Investing in art as a hedge against inflation

To most people, participating in the art market seems out of reach, as it appears that one needs substantial capital and a great deal of knowledge to invest in art. The aim of the Studierendenkunstmarkt platform is to challenge the exclusivity of the art market and open it up to anyone who is interested. Art promotes cultural heritage and is an important part of history and democracy. What would happen if the art market were suddenly accessible to everyone? Investing in art would no longer be the preserve of a select few; valuable cultural heritage would no longer disappear behind the closed doors of private collectors, but would instead be given a place in society. Investing in art should be accessible to everyone. 

 The Student Art Market monitors art colleges and universities and keeps an eye on the latest generation of art students. 

Students are the artists of tomorrow; they are raring to go, full of enthusiasm and motivation. Buying works by students is an efficient way to enter the art market. These works are highly likely to appreciate in value over the years. So investing here is a wise move. Why invest in the art market rather than the stock market? Particularly at the moment, it is fascinating to realise that the art market shows hardly any correlation with the stock market; this means that, especially in times of inflation, it remains independent. Consequently, by investing in art, one can now build up a stable alternative to the stock market. The correlation between the art market and the stock market is very low; it is only marginally affected by the highs and lows of the stock market. Put simply, this means that the art market is less severely impacted by financial crises and recovers more quickly. Why should one invest in tangible assets during inflation? Rising energy prices are affecting the value of money globally, but particularly in Europe. The prices of food, oil, gas and electricity are soaring. The best protection against current inflation is a broad diversification of investments.

 But what does inflation actually mean? 

Inflation – also known as price rises – means that the price of goods and services is increasing. As a result, there is a greater amount of money in circulation, and this consequently loses value. To measure the inflation rate over recent years, there is the so-called Consumer Price Index (CPI), which is expressed as a percentage. Currently, the CPI has reached a new high in Germany for two months running. In addition to the sharp rise in energy prices, the unusually high increase in food prices is particularly notable. If you’re looking to save or invest at the moment, savings accounts are no longer the most lucrative option, as low interest rates are eroding the purchasing power of banks, which could lead to negative returns. The sensible alternative is tangible assets, which can offer a certain degree of protection for one’s wealth. Of course, investing in tangible assets also carries a certain degree of risk, which is why it is important to decide what you wish to invest in and what the potential advantages and disadvantages might be. For many investors, investing in art is linked not only to money but also to emotions, the preservation of cultural heritage and passion. You can physically see the investment.

 It is important to consider which artists you wish to invest in.

 The Studierenden Kunstmarkt offers a good selection of students in this regard; in particular, the ‘Artists of the Month’ are promising talents of the future. So why invest in art now? In summary, it can be said that the art market provides a good hedge against inflation, and this should not be underestimated. Art is an essential part of any investment portfolio, but you should also ensure you invest in artists who have promising prospects for appreciation in value. ‘Artists of the Month’ or recommendations from Studierendenkunstmarkt are a great help in this regard.