Would artists do well to invest in their own work?

Well, about 99.99% of all artists *do* "invest in their own work" because they don't sell it and have to store it themselves. Jerry Saltz.

Robert Rauschenberg's Rebus (1955)

Via The Art Newspaper

Amy Whitaker, assistant professor at NYU, and Roman Kräussl, professor at the University of Luxembourg, have recently published a paper entitled Democratizing Art Markets: Fractional Ownership and Securitization of Art in which they conclude that artists are better off investing in their own art than in the stock market. The study was based on the historical sales data of Leo Castelli's artists (between 1958 and 1963) and compared to S&P 500 in the same period of time. Here are two examples:

1. Robert Rauschenberg's Rebus (1955): sold for $2.800 (equivalent to $25.000 in 2018, approx.). Had Rauschenberg retained 10% of his work, he would have made $575.000 in 1988 when it last sold at Sotheby's New York. This investment would have outperformed by 140 times S&P 500 in the equivalent time.

2. Jasper Johns' False Start (1959): sold for $1.000 (equivalent to $8.500 in 2018, approx.). Had Johns retained 10% of his work, he would have made $1.55m in 1988 when it last sold at Sotheby's New York. This investment would have outperformed by 986 times S&P 500 in the equivalent time.

Jasper Johns' False Start (1959)

Via Webneel

In their study, both professors state their optimistic approach, but it would be interesting to know to which extent it is comparable to today's scenario. I mean, what are the chances in today's New York art market to find the equivalent scenario? Or in other words, to which New York top gallery, equivalent to Leo Castelli's fame and name, can I go today with $8.500 or $25.000 and buy a single/original work by a renowned top American artist like Rauschenberg or Johns in the 50s/60s?

In hindsight, it is extremely easy to find financial potential to art investment considering the market has grown in such a short amount of time from being a small (almost local) scene where any passionate art lover could buy great art at a reasonable price, to a huge industry dominated by international multimillionaires and billionaires. But in an industry ruled by outrageous levels of capital and increasingly saturated by galleries, art fairs and artists, where can one go and buy a great piece of art for $10.000 with certain assurance that they are buying something fresh, new, original, groundbreaking and validated by a pool of renowned key players in the industry?

On paper and with historic data, art investment is easy. Navigating in today's art market and finding that financial potential with a small allowance, not so much, if not impossible, even for professionals. Like Jerry Saltz says, 99.99% of artists already "invest" in their work by not being able to selling it. And I am not too sure that a decent amount of these artists will find themselves outperforming financial markets in the future so as to confirm the rule underlined by this paper.