Olyvia Kwok Art Investments: identifying and accounting for investments in artwork

Similar to any other market, the art market is always hustling, with buyers and sellers trading in different art commodities, services, and art pieces associated with multiple artists. An art market resembles the stock market, where different determinants affect the value of the stock prices. Despite numerous similarities with the stock market, an art market has significant distinguishing factors that set it apart from the regular market. In an art market, people do not just invest money in art pieces, but are also passionate about gathering collectibles from all over the world. Additionally, unlike other commodities, art is inherently unique, as there is a narrow supply of art pieces in the market at any given time. In contrast to traditional markets, where electronic trades have become a norm, the artwork markets still require physical presence and involvement. It is also less organized compared to financial markets. 

Due to the high demand for unique artwork and a shortage of supply, the art market is often considered as overvalued. Regardless of the high prices associated with the art market, people are willingly looking forward to art as a promising and rewarding investment. Olyvia Kwok recently stated that “What I find is that lots of people are actually into very strong hard assets, such as properties, or see collectibles such as cars, or diamonds and everything else. Art is being financialised to be a proper asset class. I think it’s more solid, more sophisticated to be involved in”.

Many new art investors and collectors find it difficult to understand the evaluation of art pieces. Olyvia Kwok, the founder of Willstone Management, helps clients in making confident investment decisions in the world of art. Olyvia Kwok uses her comprehensive industry knowledge and global network to take clients through the unregulated art markets and offer them nothing but the best art investment opportunities. The company strongly believes that, similar to any investment, clients need to become a part of the art investment and understand how the art is evaluated based on its unique aesthetic, cultural, emotional and monetary value. 

Apart from these visible factors, there are other factors that influence the highly fluctuating art market. As evaluating art is a complicated process, experts recommend that art investors must consult an art expert before making an investment decision. One of the significant factors that affects the value of art is the huge number of artworks that, regardless of their existence, have not, will not or cannot make their way to the art market. However, these pieces of artwork significantly affect the value of art, due to their invisible yet strong gravitational pull on the art asset prices. 

Although such artworks invisibly support the productivity of contemporary and traditional artists, at times it also disrupts their productivity. The art market consists of numerous reservoirs of non-transactional artworks, along with those that can be bought and sold easily. These non-transactional artworks are likely to endorse scarcity and increase the demand for art pieces that are actively bought and sold in the art market. The non-transactional artworks often support the highly escalated prices of insignificant artworks that are known to disrupt the appearance of art value and the returns on investment on art assets. These hidden art pieces are an important factor that influences the value of art pieces at the time of every auction. 

Unlike normal art pieces, non-transactional artwork circulates in the art market as a part of informal systems of exchange. The exchange of such artwork can be commonly seen in cooperative networks or communal leisure groups. Additionally, the sharing of non-transactional artwork is also a part of sharing, fantasy, gossip, anger, or resentments, which may or may not be politically motivated.

Artwork prices are also driven by scandals and events surrounding the pieces of art. For example, rumors of duplicates or counterfeit being sold for high prices also raises the value of the original artworks. However, several art experts have also shown their concerns regarding the disruption caused in the asset prices of artworks, due to the circulation of non-transactional items. 

An important driver of artwork prices is their creator’s individuality. The involvement of the artist in social, political, or economic events affects the value of the artwork, as it is associated with those influential events. A story behind each piece of art determines the value of this work. This is a case when the context is often as important as the content. 

In addition to intangible characteristics that explain the value and prices of artworks, there are specific tangible factors as well. For example, the quality of instruments and material used and the amount of work put into the production of pieces of artwork can also determine the ultimate prices. However, what distinguishes artworks from traditional investments is that they can act as a good hedge against inflation and market volatility. The latter is observed in all contemporary markets, including the stock market, the real estate market, the commodities market, and the derivatives market. However, while asset prices correlate in the traditional markets, alternative investments show rather little or no correlation with the conventional investment instruments, which makes alternative investments, such as artworks, a good hedge and a good store of value. Yet, it is also important to remember that the market for artworks is also less liquid compared to most traditional asset markets. Therefore, investments in artworks are often made with a long-term horizon, rather than for speculative purposes.   

As an experienced art consultancy, Kwok’s Willstone Management not only helps clients in making confidential art investments, but also guides them in the entire process. Kwok says, “I like to buy things privately. I think that people would agree in some way if you’re an art dealer, because today, now there’s transparency on the internet you can always see how much things are sold for, people get a bit sensitive.” From ensuring client participation in art auctions and consortium deals to managing client portfolios and holding artworks of different values, Willstone Management offers bespoke services to its clients. 

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