1st October 2007
The major world stock markets have been increasing steadily over the last 60 years. Up until the early 1990s the increase in the stock markets were fairly stable, increasing at a steady rate. However, the stock markets experienced increased volatility after 1994 as a result of pressurised market conditions and the decrease in regulations attached to the London and New York stock markets. After 1994 we have experienced larger peaks and troughs than previous to this date.
Since 1998 we have experienced a close correlation between the global stock index and the global art market index. After the September 11th atrocities back in 2001 global stock markets went into a freefall and 2 months later so did the global art market. Back in mid July this year (2007) the US and London stock markets took a tumble due to the mortgage problems happening in the US. Does this mean that we have seen the end of rising art prices?
The stock markets have started to recover and are back to where they were in July. The art market hasnít experienced any decrease in price yet and may not as art investors will see that the strength of the stock markets are continuing and therefore will see no need to hold back on their art dealings. However, if the art market does experience a fall and the US and UK stock markets continue to rise this could present a good opportunity to buy into art as art prices may continue to have a strong correlation to the US and London stock markets.