Don’t get fooled!
Insider trading with privileged access to information at auctions is a common practice. Some sellers bid high sums in advance on their own sales to cause the prices to drift upward. The lack of independent information about this trade endangers everyone on the art market.
Dominant Art Foundations have higher initial budgets than i.e. public museums, which they use for tax-deductible donations and sponsorships. Some are so strong that they are able to use their influence in the art market and in the art world. They can manipulate reports in art publications and thus the public opinion in various ways causing unbalanced views about value and importance of art works.
Some collectors and art investors buy works by artists who have become current fashionable celebrities instead of artists who represent the true spirit of the time and produce (or have produced) sustainable art. On the long run, this results in a waste of money.
In 2015 an oil painting by French Post-Impressionist artist Paul Gauguin titled ‘When Will You Marry?’ was sold for almost $300m (£197m), the highest price ever paid for a work of art. Is such an investment financially viable? The value of an object is higher for the owner than the commercial value, because he establishes a relationship with the piece of art. It brings a mental return. Despite the low overall yield, in such a particular case, money is invested in art, if the owner receives a positive psychological return, even if the financial return is low.