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An industry still at its developing stage, art investing has several advantages. Art funds are more immune to external factors like economic crises. Because art funds buy and hold on to the artworks, they are less susceptible to fluctuations in the market (Horowitz 148). Even during inflationary times, a work of art will still be worth something, whereas company shares often become worthless (Horowitz 148). Also, since the art market is "fragmented “fragmented and hybrid," ” a decline in price of works in one sector does not mean the same for another sector (Horowitz 148).
In Tosca Photography Fund's Fund’s year end report by Professor Finley, it is revealed that many factors affect the valuation of artworks, among which are rarity, historical and intellectual weight, uniqueness, subject matter, provenance, exhibition history, printing dates, and medium (Finley 4,5). For photography in particular, printing in editions lead to the decrease in value (Finley 4). Often times, the prices of works by other comparable artists are helpful in determining the value of an artist's artist’s work (Finley 5).
If I were to establish an art fund, the basic design would be as follows:
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