“As an art dealer, you might expect me to say that art is a brilliant investment, and the ideal alternative asset class. But on a purely financial and short-term level, I would tell you it isn’t, as the FT argument proves. Art is very illiquid, hard to sell quickly, and worse, it’s hard to buy, or at least buy the right thing. In order to guarantee not buying a dud picture (say, one in bad condition) you have to use expert advice, and that is often expensive. And then there are charges relating to the purchase and sale of the art – at auction, anything up to a combined figure of 40%. All these costs need time to fall away in relation to the picture’s capital accrual, so you have to keep your painting for the medium to long-term. The 22 year period for for re-selling The Lock at auction s, I’d say, probably too short for a picture so well known.”
On the other hand, art as an asset class has the benefits of stability. Unlike Enron, a famous Constable cannot go bust. If the FT had done its calculations in early 2009, when the stock market crashed, The Lock would have looked like a far sounder investment than shares. And of course art lovers everywhere will know that to value a painting in terms of its ‘opportunity cost’ is philistine reductionism. The dividend of pleasure from owning such a work is incalculable. “
Bendor Grosvenor, Calculating Constable @ Art History News.