Kathryn Tully, Freelance Journalist on the Art Market

The art market is opaque, unpredictable — and endlessly fascinating, not just to potential buyers and sellers, but to art lovers the world over. The market for investment-grade art is small, and unlike most markets, it isn’t driven as much by supply and demand but by perceived and somewhat arbitrary value.


The vast majority of transactions in the art market are not recorded publicly so the prices or not known. There are no public records of art transactions apart from those pieces sold at auction, and even for auctions the prices are not always disclosed. The opacity and the fact that art is not a liquid asset makes the art market all the more difficult for a novice to navigate. There is more transparency regarding sale prices for prints and multiples because of the comparables.


The value of the worldwide art market $65.1 billion in 2021, making that year the third-best year for sales. Yet despite that number, most of the art produced in the world is not going to be sold for a profit, and estimates say that 90% of art devalues the minute it leaves the gallery. The prices for investment-grade art is generally considered to be $500,000.


Because of the lack of resale value for most art it is often considered a good idea to buy art that one likes, making art one of the few assets where it can make sense to be rules by the heart rather than the head. For many buyers, the real value of a piece is in the pleasure derived from owning and displaying it.

POC: Welcome to This Is Capitalism, the podcast. I’m your host, Patricia O’Connell.

The art market is opaque, unpredictable — and endlessly fascinating, not just to potential buyers and sellers, but to art lovers the world over.

The art market is also big business. One estimate put the sales number for 2021 — the third-best year for sales on record — at $65.1 billion dollars. 

Here to paint us a picture about the intersection between art and commerce is Kathryn Tully, who has been covering the art market for 15 years.

Kathryn, thanks very much for joining us today on “This Is Capitalism.”

KT: Hi Patricia, it’s great to be here.


POC: Kathryn, first of all, tell me a little bit about how you joined these two forces together in your work.

KT: Well I’ve been a financial writer ever since I graduated college, and I started writing about the art market I guess 15 years ago, which was around about the time I started freelancing.

And it sort of interested me because I feel like too much press coverage, well, actually then and now, is about big auctions of multi-million dollar art works sold in New York and it sort of suggests that the art market is the only market in the world where prices always go up and that’s just not the case. It’s actually a pretty difficult investment market. You know, the suggestion is out there sometimes that investing in art is pretty straightforward, data driven, and a transparent business and that’s just simply not true. So I felt like writing about this enables me to put some no-nonsense articles out there that aren’t getting written otherwise.


POC: As someone who is not as well versed in the art market as you are, it seems like it’s a place for the ultra-high-net-worth individual.

KT: Well it’s a very tiny sliver of the art market, those really, really multi-million dollar works that sell for high prices at auction. I think one of the things that’s not talked about in the art world at all is that there’s this whole universe amazing, inspirational, incredible art that’s being produced all the time that you would love to have in your home, but most of the art produced in the world is not going to be sold for a profit at all. I mean, one art advisor once told me 90 percent of art devalues the minute you leave the gallery with it.

POC: Now when you say sold, you mean resold at a profit?

KT: Right, exactly. The art you buy today you are not going to be able to resell for a profit. But of course if you read the press about the art that does resell for a profit, and that’s those Basquiats and Warhols and art that’s sold between high-net-worth individuals, often at auction because that’s the transparent part of the art market where transactions and prices are available.

There are some people who say that investment-grade art, you’d have to spend $500,000 or more to really get a good shot at selling it for more. I mean there are people who dispute that and of course there are always these anecdotes about people buying art for peanuts and selling it for huge amounts that exist.

POC: Or finding the thing at the garage sale or at Goodwill and it turns out it’s  

 a Van Gogh or a Winslow Homer or something like that.

KT: Exactly. There are all those amazing anecdotes out there, but the fact is, it’s not as simple as that. Most art doesn’t have a resale value and of the art that does, the performance of the art market as a whole, is not that brilliant in terms of annual returns when you consider the risks that it has, the kind of unique risk characteristics of the market.

POC:  Well it’s also not a very liquid asset, is it? I mean in contrast to securities, for example, art can be enjoyed, it can be displayed in one’s home, it can be part of a collection, it can give one pleasure on a day-to-day basis, but when you need to raise the cash isn’t necessarily going to be an auspicious time to sell.

KT:  No, exactly. And even commercially valuable art can take months or even more to sell through a dealer or an auction house and you’re not guaranteed to find a buyer then because, you know, the problem is it’s not just an illiquid market, it’s a pretty tiny market.

I think 2021 was the third-best year for art sales on record and the estimate for total sales through dealers and auction houses. And Art Basel and UBS put out a report – the estimate was 65.1 billion in sales. But when you think about the daily trading volume of a stock like Apple or Microsoft, that’s tiny.

And remember there are holding costs in owning art. I mean, you have to pay for the insurance, storage potentially, there are fairly hefty buying and selling fees as well.

POC: So is art ever a good investment?

KT: Yes. I think the times art is the best investment is if you buy something that you really love and you happen to find that it’s gone up a lot in value. My friend that I know from the UK has an amazing story like that. His wife bought him this Banksy print back in 2003 for his birthday and it was a Banksy screen print of this monkey wearing a sandwich board and it just had the slogan “Laugh now but one day we’ll be in charge.”

And he bought it for 150 pounds. It was at a sort of a pop-up store for alternative Christmas presents, I think, in London, and she thought well that’s a lot for a print, 150 pounds, don’t know if I want to spend that much. But it was signed and it was one of an edition of 150 and she thought it would make a good gift so she got it for him. And then towards the end of I think it was 2020, my friend talked to a Banksy dealer and he said that that monkey print was probably worth 150,000 pounds. Not 150 pounds, 150,000 pounds.

POC: Okay, that’s what, three more zeroes?

KT: Yeah. And I figured out that was like a 50.1 percent compound annual return for 17 years or something. Now of course that looks like a very, very good investment retrospectively. But I mean she didn’t buy it because she thought it was going to go up a lot, she bought it because she thought her husband was really into Banksy and it would be cool.

The other thing I think that is relevant to that is that pricing in the art market is very subjective. Because no two art works are the same, except for prints and multiples – like we were just talking about Banksy – but generally speaking, art works are unique objects.

And even very similar artworks by the same artist can sell for different prices because they are driven by subjective factors. Like the buyer might just need that one piece to complete his or her collection. In another case, art might bomb at an auction because everyone left to go and get dinner before the end. There are all these different subjective things that build into the cost of the actual price of art. So that makes it difficult.

POC: Do artists go in and out of favor?

KT: All the time. That is another thing, like, I mean, Banksy is another good example that if you look at the Banksy print market over time, and that is one way you can look at the prices because there’s quite a lot of volume out there, you’ll see that sort of goes up and down, it ebbs and flows.

It’s a very thin part of the market that generates the most value, a very small amount of transactions at the end of the day. So are you going to find a buyer at that highly elevated price? There may only be sort of ten people in the world that are interested in buying at a certain price for your very expensive Warhol or Basquiat or whatever. So timing the market and finding those buyers…that can be quite tricky.

POC: But are there lesser works that people buy just for name value?

KT: Yes, I think so. And I think going back to the print market that is an area where you can obviously acquire artworks by those artists but at a cheaper price point. And yet the interesting thing about prints and multiples is that there’s a bit more data about those because they are higher volume and because they, unlike the rest of the art market, aren’t completely unique, they are one of an edition of 150 or 200 or whatever it is.

You can sort of see what other people are paying and potentially what they’re selling for as well. I wouldn’t say there’s any liquid part of the art market but certainly for particularly high-end prints by certain very well-known artists you can actually get a better sense of whether you’re getting value for money and what a resale price might be.

The art market is pretty opaque. I mean you do have these art indexes out there, but they are based on records of public art sales at auction. And yes that’s valuable but auction data, for a start, it’s the most successful part of the market, you know, art that’s deemed the most valuable enough to be resold in the first place. And the other point is that the majority of global art sales don’t take place at auction houses, they take place through galleries and dealers who don’t reveal their prices or their transactions information at all.

POC: So is it that people don’t even know what pieces of art were sold? Or they also just don’t know what the prices were for those pieces?

KT: Both. Information about buyers and sellers and transactions and profits… There’s no requirement for that to be publicly available. Certainly not in the U.S. There are beginning to be more regulations about it in Europe.

You don’t know what those galleries and those dealers have sold or what price it was for, which is why the whole market can be a vehicle for fraud because you could buy something and then offer it to someone else and say “I paid this for it.” And you might have a piece of paper that you could show them but there is no way of verifying that information. There’s no public record of art transactions apart from at auction and even then you don’t always know the prices. In the world of galleries and dealers that information is never available.

POC: Is it different with artists who are no longer living so there is a finite quantity of their work and presumably much of their work is known?

KT: Dead artists are always valuable artists, it seems to me. I think one thing to say is that the art that’s in vogue at the moment, which a lot of it is contemporary and ultra-contemporary art, it’s popular, I think, because the majority of art buyers are interested those markets because of their generation – possibly, it’s a generational thing.

I think some older art or art by deceased artists, if you’re looking at long-deceased artists, like Old Masters or even…I don’t know, Dutch Impressionists or something, they don’t necessarily stay in favor. And I think it’s because of the sort of generation of collectors that did buy them is dying off as well.

POC: When we think about a market, we think that prices are set by supply and demand. That is the traditional way that a market works, especially in our capitalist economy. But price is different than value. And demand is different than value, I think. So is value necessarily reflected in demand or vice versa?

KT: Value is driven by a lot of subjective factors and it’s not just supply and demand. You can’t even really see where the demand is a lot of the time because so many of the transactions are not disclosed, you  know? It’s sort of like the opposite of looking at a stock. And clearly the opposite of a stock where you can sell it on any day at a price. You can get a price for a commodity like gold or a stock, like a liquid stock on any day, and sell it.

And you can see, as you said, like the fundamentals that are driving that price. You can’t see either of those, you can’t see the fundamentals of the art market and you have no idea whether you can sell your piece of art on that day or not, or even in two months or a year. You know? It’s a very different market.

I think there should definitely be more transparency. One thing that was quite interesting during the pandemic is that when a lot of the art fairs started going online and they had all these virtual viewing rooms because people couldn’t go to art fairs in person, what started happening then is you got some sort of dealers at art fairs revealing more of their prices, you know, being just transparent about the prices of art that they had in their booths because people weren’t actually going there in person. I don’t know whether that will continue. That was a pandemic-related development. But that is a good sign.

POC: We talked about obviously there are artists who are no longer living, who obviously are not producing more work. Every so often you find a piece of work that may or may not be appropriately or accurately accredited to that artist. But then there are artists like Banksy who keep on producing and then he also destroys some of his art. What does that do to the supply and demand equation for his art? I know he has also sold art at auction and I believe part of the gimmick, if you will, was then it was destroyed the minute it was purchased.

KT: Yeah, exactly. Well I think the thing about Banksy is he’s got these famously anti-art market stunts. And I think that shredding incident was supposed to be his sort of poking his tongue out at the art market and saying I’m going to actually destroy this work of art in front of me. The irony is, of course, that that shredded Banksy certainly went up in value after its shredding.

POC: If you had to sum up three trends in the art market or maybe three things that you think someone who is thinking about investing in the art market should know, what would they be?

KT: The first thing you need to bear in mind is maybe 90 percent doesn’t have a resale value. I think if you’re looking at prints and multiples, which is obviously an accessible part of the art market for a lot of people because the price point is lower, there’s a lot more data available for that part of the market. So you can get a bit of a better sense of prices today and what the trajectory of prices has been for those particular prints. That’s two.

The third thing I think, and this is a cliche that is always trotted out about art investing, but I think this is actually a very important point, you’ve got to buy art because you enjoy owning it. Because there are so many other variables, you don’t know if you can sell it for a profit and you certainly don’t know when you can sell it for a profit.

POC: Kathryn, do you have any of your own stories about that fabulous piece of art either that you bought for 50 pounds or $50 and it turned out to be a great investment? Or do you have a story about the one that got away?

KT: No. I haven’t sold any of the art that I bought because I love it. I didn’t buy it for resale value, which maybe makes me a bad advocate for talking about art investment

There’s so much art that I would’ve loved to have bought that got away and that’s a difficult thing. I like to buy art that’s resonant to me. I own, well, just artworks that friends have produced and I try to buy and support their markets, original art that’s created in my neighborhood.

You know, there’s lots of accessible, original art you can buy. There’s lots of art platforms now that sell original art and limited-edition prints by a whole range of both emerging and established artists. It’s really worth investigating. I think the Internet has been brilliant for that, for sort of broadening access to loads of original art.

POC: And don’t be swayed if you’ve never heard of the artist.

KT: Absolutely. Absolutely.

POC:  If it speaks to you, enjoy it.

KT:  That is the most important thing, yeah.

POC:  Okay Kathryn, fun question, if there is one piece of art in the world you could own, what would it be?

KT:  Oh my goodness, that’s so difficult. One piece of art, not even an artist? Well I’ll tell you something, I don’t know about one piece of art but if I could own one Basquiat work I would be over the moon. Even one of his little…oh I say even…even one of his little sketchbook drawings, which are probably worth a fortune these days.

POC: And you’d never sell it.

KT: No I’d never sell it, I’d never sell it.

POC: Okay. And Kathryn, where can we find out more about your writings on the art market? Where can we read more of your work?

KT: Right so I used to have this blog, Priceless, on Forbes for eight years but last year I moved it onto Substack. So Priceless is now an art-investment newsletter and that’s where I write, well I try to write no-nonsense articles for art buyers. And the URL for that is priceless.substack.com.

POC:  So it’s Priceless.substack.com.

KT:  Exactly.

POC: Thank you, Kathryn, for joining us today on This is Capitalism and think you, listeners, for joining us today as well.

About the Series: Featured stories from the intersection of the free market and entrepreneurial success. Here we speak with leading CEOs, academics, philanthropists and up and comers on their contributions and perspectives on the American economy.

About Patricia O’Connell: Patricia O’Connell serves as Editor in Chief of “This Is Capitalism,” a content site sponsored by Stephens Inc., and is host of the site’s podcast series, “CEO Stories.” Patricia, a former editor at BusinessWeek and a New York Times best-selling author, brings her experience as a journalist and her passion for storytelling to “This Is Capitalism.”