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August 29, 2005
Dear Client:
Most serious art collectors
choose acquisitions primarily based on the artistic merits of
a work. Of course, savvy collectors also have an interest in
the art market generally and the current value of comparable
works by both the artists whom they collect and these artists'
peers. Thus, in our continuing quest not only to offer exquisite
works of Western art, but also to provide personal service that
is their equal, we thought it time for another update on the
market. With the fall of the stock market starting in 2000, coupled
with a recession made worse by the tragic events of September
11, the art market found itself in a general holding pattern.
Collectors were understandably reserved in committing disposable
funds to art purchases.
Today, however, the picture is quite different. Art has led the
way in the broader marketplace towards a bullish recovery. Since
the start of 1999, through the end of 2004 (the last point at
which data is available), the American Art Index experienced
a 13 percent annualized rate of return. This return dwarfs the
return for the same period for many of the more common financial
indices, including the S&P 500. Of course, purchasing works
of art is a much different ball game than investing in most financial
vehicles. One cannot buy shares in the American Art Index, so
the broader market cannot be tapped. Still, it does help illuminate
general trends of advancement.
Purchasing individual pieces of art is much more like purchasing
individual stocks -- looking at this scenario solely in terms
of possible financial returns -- in that you have to evaluate
carefully, have a good eye, and choose the proper piece for your
"portfolio." Not all works by an artist are of equal
merit, nor are all fields within the art market in general experiencing
the same level of interest within the marketplace. In this regard,
the Western portion of the American art market is among the hottest
parts today.
The normally internationally-focused art journal "Art +
Auction" featured an article in its July 2005 issue titled
"Best Western," that focused on the amazing amount
of attention being paid to this genre. The author, John Dorfman,
documents well the changes and advancement of the Western art
market. Scholarship is one of the influences that has made this
portion of the American art market of greater interest to the
art market as a whole. Whereas the art elite of generations past
often saw Western art as provincial kitsch, professors, auction
houses, dealers, and collectors throughout the broader market
today recognize the depth and value of the field. Experts are
now attuned to the influence that Western artists have asserted.
Dorfman asserts that this increased focus on the Western art
market has corresponded with its overall rise in monetary valuation.
We are seeing this sea change in our own research. Interest in
the major artists of the genre is as great as its ever been.
Record prices for the works of these artists are being realized
again and again. However, it is not only with the better known
names of the field that the market has risen in both interest
and financial gain. Formerly lesser known artists are being sought
out as interest in the broader field grows, with corresponding
changes in value. Take the Santa Fe artist Sheldon Parsons as
one example. His "Adobes in Panoramic Landscape" (24"
x 32") sold at auction in 2003 for $15,400.00. Two years
later, the roughly comparable "Storm Overhead" (24"
x 36") sold for $49,450.00. Certainly, no two paintings
are ever going to be a direct apples-to-apples comparison --
that is one of the great challenges and rewards of collecting
-- but this change is reflective of the broader trend.
This discussion has focused on the possible monetary rewards
of collecting Western paintings. While certainly relevant to
all and of interest to most, it is generally not the reason that
we as collectors choose an artist or a field to collect. What
makes purchasing a painting different from purchasing a stock
or other similar asset is the joy that experiencing this object
imparts. One of the great rewards of being in this field is being
surrounded by beautiful works and interacting with those who
value them as highly as do we. That a solid case for collecting
can be made from a financial standpoint only sweetens the deal!
Feel free to call on Michael and me at any time. As always, our
works can be viewed on the Internet and additional images are
always available. Thank you for your time. We wish you the very
best in your collecting.
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