Art valuation now treats artworks as portfolio assets with uncorrelated returns

Evidence

Works of art are now considered not only for their aesthetic quality, but overtly as a new class of asset that is useful in managing a diversified portfolio (Hutter 2014; Horowitz 2010). As a publication by the bank JP Morgan explains, ”[o]nly recently has art investing been viewed through the lens of modern portfolio theory and considered as a potential alternative investment in a portfolio of assets. (…) art can offer long-term return potential that is uncorrelated with other asset classes” (Morgan 2014). The arrival of new categories of buyers who have made money on the financial markets has also changed the art market, as these new buyers bring with them their speculative business practices, just as the new philanthropists transformed donation practices due to inspiration from their success in venture capitalism. — Ève Chiapello, Financialisation of Valuation, 81

Categorization

• XREF: Connects directly to the financialization-of-valuation thesis running through this reading; the JP Morgan framing parallels how finance colonizes valuation in philanthropy and environmental policy. — connects to: Asset value derives from future earnings rather than intrinsic commodity value — Kean Birch, Rethinking Value in the Bio-economy:…, 73; Negative real interest rates drove capital into collectibles and artworks — David Harvey, The Condition of Postmodernity: An…, 1879; Financialised valuations override prior forms of valuation and reshape how people act and identify — Ève Chiapello, Financialisation of Valuation, 16 (+4 more)
• SEED: Angle: the JP Morgan quote is a stark artifact of financialized art discourse — could anchor an essay on how banks rebranded collecting as portfolio management.
• SHARE: The specific JP Morgan language about art being ‘uncorrelated with other asset classes’ is exactly the sort of thing a finance-culture friend would appreciate.

Broader Connections

• Good diversification requires assets uncorrelated with each other and earning above cash returns #corroborates (0.85) — Mark Blyth, Austerity, 715
• Negative real interest rates drove capital into collectibles and artworks #expands (0.80) — David Harvey, The Condition of Postmodernity, 1879
• Financialised valuations override prior forms of valuation and reshape how people act and identify #expands (0.80) — Ève Chiapello, Financialisation of Valuation, 16
• Speculation prices assets by imagined future appeal to others, not actual value. #complicates (0.80) — Aris Komporozos-Athanasiou, Speculative Communities, 138
• Private equity backing turned song catalogs into uncorrelated financial asset classes #exemplifies (0.78) — Andrew deWaard, Derivative Media, 228
• Asset value derives from future earnings rather than intrinsic commodity value #qualifies (0.75) — Kean Birch, Rethinking Value in the Bio-economy, 73
• Capitalist commodification displaces the aesthetic value of art #qualifies (0.75) — Wael Hallaq, Restating Orientalism, 69