Invest in Art?

Hugh Grant bought this Warhol print of Liz Taylor for about two million pounds and sold it six years later for around £9m. So is art a good investment?

Not really, says Janine Racanelli, head of JPMorgan Private Bank's Advice Lab (see preceding post). She told the Financial Times the art market is opaque, illiquid and unpredictable. And once you hang art on the wall, it's "cash-flow negative."

That doesn't faze some hedge fund managers. An earlier Financial Times article spotlights the Art Trading Fund.

Launched last summer, the fund hopes to hedge against art-market hiccups by shorting assets, such as Sotheby's shares, that tend to move in tandem with art. The strategy may get a robust test this year.