As Bloomberg reports, Goepfert’s recent note, analyzing the relationship between record art sales and the stock market, strongly suggests, “previous bouts of expensive art sales have indicated over-confident conditions in the stock market as well.”
There is broad overlap between the markets, now more than ever. Wealth concentration is near an all-time high, and with stocks doing so well, it has helped to fuel massive confidence in other “greater fool” markets like art.
…The market is relatively isolated and a plateau in art prices wouldn’t have much affect on broader assets, though it would likely be coincident with a plateau in stock and bond markets.
With the art market hitting a new milestone last week, perhaps it is time to consider reducing exposure to the exuberance.
