By now you’ve heard about the Vincent Van Gogh painting that sold at auction for more than $66 million, tens of millions more than it was expected to fetch. The last time this same painting was sold was 2003 when it sold for $12 million. A 452% return in 12 years. Not bad.
While Van Gogh was the star of the first major spring auction at Sotheby’s (BID), the event brought in a total of $368 million.
But what might the success of the auction say about the broader financial market?
Art has long been seen by the wealthy as an alternative investment for vast sums of money, but Tom Lydon, editor of ETFTrends.com notes that big buys like the ones we’ve been witnessing are backed up by markets.
“This has been a long-term bullish uptrend both for stocks and bonds,” he notes. “And during those periods of time when more people have more money they find other ways to spend it.”
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Yahoo Finance’s Jen Rogers notes that such market tracking can also be seen, not just in what sells at the likes of Sotheby’s, but in the shares of the auction company itself.
“Some people say it sort of tracks the ups and downs because it’s a sign that... there’s easy money out there.”
Not a lover of fine art? Lydon says it’s not just paintings and sculptures that grow in popularity when the money is flowing.
“Wealthy investors can also justify [these things] as an alternative investment and so we’re seeing it in cars, we’re seeing it in wine, you’re seeing it in stamps.” He adds that this is more or less what you should expect to see around a bull market that is getting “long in the tooth.”
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