Mei Moses World All Art Index Decline Continues

 Beautiful Asset Advisors and the Mei Moses Fine Art Indexes just released a new tracking report showing the World All Art Index declining 2.2% in the month of February. In January the index also declined, but at 2.4%.  The index also continues to underperform equities.

The Mei Moses tracking report states

WEAKNESS CONTINUES IN THE WORLD WIDE ART AUCTION MARKET AS U.S. EQUITIES ATTAIN A NEW ALL TIME HIGH

THE WORLD WIDE AUCTION ART MARKET CONTINUED IN A NEAR DORMANT STATE WITH THE YEAR TO DATE PERFORMANCE INDICATING A DECLINE OF 2.2% IN THE MEI MOSES® WORLD ALL ART INDEX.  THIS IS A SLIGHT IMPROVEMENT FROM THE 2.4% DECREASE OF LAST MONTH.  IN ADDITION ART CONTINUES TO UNDERPERFORM EQUITIES© 

        MONTHLY TRACKING GRAPH THROUGH FEBRUARY 2014

Our expanded database provides sufficient and timely incremental data for analyzing the world art auction market on a continuous basis.  We create monthly tracking reports for the Mei Moses® world all art index for the cumulative world wide sales that have transpired during the year up to the end of each month.  We treat the sales in each successive year-to-date period as if they represented transactions for the full year. The figure on the first page shows the 2012 end-of-year value for the new index (set at a value of 1.0) and twelve alternative projections for 2013 end of year values based on the successive monthly sales.  There are no auctions in August so we do not include that month in our analysis.  The twelfth point becomes the true value for 2013 since it is based on all transactions in that year.

The first point for 2014 is an estimate of year end 2014 value and is based on the total transactions for the first month of the year the second point adds the transactions for February.  All monthly values assume that no additional repeat sale pairs would be added to our database between the end of each month of the year and the end of the year.  The figure also compares the world art index with the monthly closing values of two total return equity indexes.  We now also supply a three month moving average of the world all art index for those individuals who feel that the relationship between this average and the actual index, like the fifty day moving average in stocks, provides information as to whether it is currently a good time to make purchase or sale decisions.

Our data collection and reporting efforts based on 13 Sotheby’s and Christie’s world wide auctions that occurred in February 2014 produced 398 repeat sale pairs mainly from the impressionist and modern (IMPMOD) and post war and contemporary (PWC) collecting categories. A majority of the sales occurred during the main winter sales in London and we reported on them in detail earlier in the month.  There was one small American painting (AMP) sale which occurred in New York. These pairs allowed us to create the Mei Moses® world all art tracking index for February 2014 which produced the aforementioned 2.2% loss as compared to the closing value for year end 2013.

It is interesting to note that last month, when mostly old masters were for sale, that there were seven items that had been held for over 225 years and produced an average CAR of 3.5%.  Given the collecting categories represented in February it was not surprising to find no works that had an auction interval of greater than 45 years.  The average CAR for the 29 works with an auction interval between 30 and 45 years was 7.4% again showing that art is a good wealth preserver since the average annual growth of the consumer price index over these periods was about 4%.  

Please note that prior performance of our indexes does not guarantee future results.  In addition, there is no guarantee that random collections of individual works of art or stocks will yield index returns.  We are not financial advisors and we are not in the business of recommending art as an investment.  We also have no comparative advantage in forecasting the future direction of the art market.  Investment decisions should be based on the risk return tolerance and time horizon of the investor with, if desired the support of a licensed financial advisor.   This information is provided "as is" and with no representations or warranties either express or implied of accuracy, merchantability, fitness for a particular purpose or of any other nature are made with respect to this information or to any expressed views presented in this information.   

Source: Beautiful Asset Advisors/Mei Moses