Some of those attending this year’s Investec Cape Town Art Fair might be entrepreneurial new collectors looking to buy work from up-and-coming African artists with the intention of turning a profit and diversifying their investment portfolios.

However, the seemingly unpredictable nature of the art market might act as a deterrent.

The art market is more complex than other investment markets, such as stocks and government bonds, as art has an intrinsic value that cannot necessarily be quantified and plugged into economic models as easily.

This makes investing in art a greater risk, as there is no guarantee that the actual returns will be as high as the expected returns.

Art is classed as a luxury item and its prices are determined by trends, fashion and how much the wealthy are willing to spend on a given work. Higher-priced art can also have significant costs attached, such as a higher buyer’s premium and insurance. Read More Here