Felix Salmon — who is a financial blogger for Reuters, and, for the record, married to an artist — occasionally wags his finger at writers who cover the art market as they would any other financial asset. In a recent post, he points to Patrick Mathurin, a Financial Times journalist who made the grave mistake of comparing the rise in the Mei Moses Art Index to stock market returns as if he were comparing apples to apples (which, for the record, ARTINFO admits it sort of did in an article about SWAG, which ironically is not "stuff we all get," but silver, wine, art, and gold, the stuff that few can afford).  

Salmon argues (and has argued 872 times, apparently) that art is not an investment. He wants journalists to stop writing about art as an asset class, arguing that "Art doesn’t have returns, it just sits there, being expensively insured. It pays no dividends, and it can’t be marked to market, since the only way to find out the market price for an artwork is to sell it."

Salmon is mostly right: art doesn't have returns, it's expensive to insure, and it can't be marked to market (accurately). But those things don't preclude art from being purchased as an "investment," they just make art a mostly terrible investment for the vast majority of the population. Salmon commits the same error in coming to his conclusion as Mathurin: he writes as if the issue over art investment were black and white, as if every reader he has should look at the art market in the same way. In reality, the art market is more like an Ad Reinhardt painting — there are so many different shades of black.

Certainly, art is not a traditional investment. Most investors should listen to Salmon. The 99 percent — or even the 99.9 percent — shouldn't think of art as an investment. To make money on art you have to have lots of money (preferably billions) lots of time (like, decades) and above all, an interest in art that borders on obsession. The people that immediately fall into this category are mostly oligarchs of one kind or another — they're the Steve Cohens, the Roman Abramovichs, and the various Mugrabis of the world.  They have more money than they could dream of spending in a lifetime, and can therefore absorb the shock of spending and potentially losing millions of dollars on objects that hold little intrinsic value and can rarely be accurately assessed for investment purposes.

What is irresponsible is not referring to art as an investment class — because it can be for those lucky few who know the market well enough and have pockets deep enough to spend millions on the likes of Picasso and Warhol — but to pretend that the average investor should consider it an investment class that belongs in his or her portfolio. Art is an alternative investment for those mentioned on Forbes lists, not for Joe the Plumber, or even Joe the Investment Banker.

Investing in the "art market" is essentially throwing your money into an unregulated market. It's extremely risky and should not be undertaken by anyone without bottomless capital and a superior knowledge of the industry. It's been compared to other luxury "alternative investments" like gold or even real estate (once again, SWAG). But buying the kind of art that might make you money is more in the realm of buying a sports team (even some of the same players are involved). The fan-owned Green Bay Packers notwithstanding, neither sports teams nor major art purchases are investments that should be undertaken by the layman, but they are still investments that can pay off when done right — and that's a distinction that should probably be made more clearly more often.