Rather Depressing Trend

Skate’s Art Market Research, which has observed the sector since 2004, recently published the first part of its ‘2012 Annual Art Investment Report’, which examines its Top 5000 ranking of the world’s most valuable works of art as determined by public auction price. In this latest report, the Skate’s team address the various changes that occurred in this premium segment of the art market by comparing the sector’s performance to 2011 as to artist rankings, sales volume and value, investment performance, and general changes in the ranking structure.

As reported by Forbes earlier this month, the Skate’s findings point at a new trend in the art investment sector. The conclusion of the Skate’s analyst team is that fewer yet wealthier people are buying more expensive art from a limited selection of established names. Confirming the trend, the total capitalisation of artworks in the research firm ranking climbed nine per cent in 2012, while the number of new artists appearing in the ranking declined to 38 in the past year from 81 in 2011.

Returns on Repeat Sales Down

Sales for the priciest of artworks ranked in Skate’s Top 5000 fetched $2.3 million (£1.4 million) and above, totalling $33.3 billion (£21.1 billion), with painters Gerhard Richter, Pablo Picasso and Andy Warhol leading the pack for most auction sales overall. Joining Richter, Warhol and Picasso, Jean-Michel Basquiat was amongst the artists in the category of most repeat sales above the $2.3 million mark in 2012, where only 118 sales of artworks in the ranking had appeared at auction before. The weighted average return on those repeat sales was 4.87 per cent, down from 7.2 per cent in 2011, with an average holding period for those works of 9.3 years.

2012 Biggest Gains and Losses

Skate’s art investment report also tracked the repeat sales in 2012 which generated the greatest financial gains or losses for their former owners. The highest return on a repeat sale was produced by Italian-born painter Giuseppe Castiglione whose work “An Imperial portrait of Consort Chunhui” generated a return on investment of 46 per cent after a seven-year holding period, selling for $4.5 million (£2.8 million). Not everything made money though. One notable loss was produced by Marc Chagall’s “La Musique” which sold for $2.1 million (£1.3 million) in 2012, producing for its vendor a 25 per cent loss after a one-year holding period.

As announced earlier this month, Skate’s will publish its ‘2012 Annual Art Investment Report’ in three parts. Towards the end of this month, the research group is set to publish the second volume which will focus on the global art industry, while the final part is expected to cover Skate’s predictions for 2013.

You can learn more about art investment here

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Statistics have shown that the majority of failed small businesses lack underfunding and adequate capital investment. As a small business owner, it can be difficult to find the right funding source to meet the investment levels that will ensure your business has a fair chance for success in the market. A merchant cash advance is an alternative cash source that may be an ideal way for your business to get the funding it needs without the added risk of a conventional loan.

Is a Merchant Cash Advance the Same as a Loan?

When a small business loan is contracted by a business owner, the principle amount is paid back through payments that include interest. The interest rates on small business loans tend to be less reasonable for new businesses simply because they lack the merchant credit history that is required to garner a low interest rate. Merchant cash advances are different from loans because they are based on a flat fee rather than interest. The money is paid back automatically without further action by the merchant.

How Does a Merchant Cash Advance Work?

Any business that has accepted credit card sales for more than 60 days is typically eligible for a merchant cash advance. The provider in this case is known as a factoring company. When applying, the factoring company will agree to a lump-sum payment to the applicant business in the form of an agreed amount. The business owner is then free to invest the new capital into his immediate operation. The factoring company then retrieves the investment from credit card sales payments that are made to the merchant from credit card companies in lieu of that merchant until the full amount of the cash advance and the flat-rate fee have been retrieved.

What Are the Benefits to a Merchant Cash Advance?

The most significant benefit is that the flat-rate fee associated with the transaction is highly competitive with interest rates because it does not continually accrue over the duration of the outstanding debt. Another benefit is that the risk of repayment default is lower due to the fact that the initial principle is retrieved according to the natural influx of credit card receipts. The principle is not based on a strict, predetermined timetable.

The merchant cash advance is intended to stimulate an immediate cash flow investment that is then repaid at a prorated pace according to credit card sales. The majority of small businesses that need extra funds can benefit greatly from merchant cash advances.

Fred often writes articles on how small businesses can improve their cash flow problems. He believes that a merchant cash advance company can be an excellent solution for many companies in this situation.

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Whether playing an online game or investing your money in real life, there are a number of ways in which individuals can build themselves a winning investment strategy. We have to say that, when it comes to investing, there is no specific right way or wrong way, and no one way that will always guarantee to make you successful.

Building a winning investment strategy takes into account a whole range of factors with one overall aim: getting out with a positive return. We looked at some of the things to consider when building your own personal investment strategy.

Specific or General?

Depending on how you plan to invest, you will either want to invest generally with a view to making a return, or look at specific sectors. When it comes to specific sector investing, try to stick to those that you have a little knowledge about and will be able to make educated decisions around. It is often too easy to be drawn into investing in a particular area just because “the returns are great.”

High returns potential generally means high risk, and if you adopt a cavalier attitude you will find that out the hard way!

Learn to Read

Reading investment charts is a little bit like checking out form for horseracing. You know the information is important, but tend to look at it blankly without ever really understanding what it means.

If you can teach yourself how to read financial charts and information, you will find it much easier to get on board with winning investments. Learn how to read a chart to understand the best times to buy and, even more crucially, the best times to sell, so that you can maximise all of your investment returns.

Know Your Limits

Before doing anything involving finances, you should know what you are looking to spend. If you are committing money to a private equity fund, then put in what you want initially, and then leave it there. If you use an online trading platform, ensure you have it set up so that you can automatically sell or stop if you lose a certain amount.

It is easy to be drawn in by attractive looking, high numbers, but very difficult to deal with the repercussions of being financially irresponsible. Ensure this doesn’t happen to you.

Find Resources

Although you will understandably want to build your own investment patterns, it is always worth picking up top tips from those who have been successful in the industry. If you are using a private equity fund then you will have a wealth of experience to help you, while if you are going it alone, for example online, you should make use of blogs, infographics, social media and emailing lists in order to glean as much advice as you possibly can.

Rob is a writer on the private equity marketiplace and has specialised in raising funds for entrepreneurs over a series of years, ranging from local investments to mulit-million pund funding.

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