Yingying Xu

Date of Award

2026

Document Type

Thesis - Restricted Access (SIA Only)

Degree Name

Master of Arts (MA)

Department

Art Business

First Advisor

Maria Sancho Arroyo

Second Advisor

Noah Kupferman

Abstract

This paper critically examines two dominant investment strategies in the art market: short-term trading (the "Flipping" strategy) and long-term holding (the "Buy-and-Hold" strategy). Although artworks have traditionally been collected for their aesthetic and cultural value, their increasing financial value for artworks has prompted investors and collectors to treat art as a strategic asset in recent years. Both investment strategies show significant differences in terms of expected returns, risk exposure, and operational requirements. Case studies with quantitative market analysis will be combined in this research to evaluate both strategies' financial and non-financial dimensions. When examining the risks and the return of short-term holding versus long-term value cultivation. Key factors like liquidity constraints, transaction costs, market cycles, and macroeconomic influences will also be taken into consideration. Furthermore, non-numerical factors such as aesthetic, prestige, and emotional factors that complicate profit-driven purchase would also be included.  The analysis challenges the notion that “a single universally superior strategy exists,” arguing that the effectiveness of "Flipping" versus long-term "Buy-and-Hold" depends on multiple personal and market factors, including an investor's capital flexibility, risk tolerance, expertise, and cultural objectives. By integrating financial theory with the unique characteristics of the art market, this paper aims to construct a systematic framework to assist collectors, investors, and art market practitioners in aligning their asset allocation strategies with their overall financial and cultural goals from an investment point of view. However, this study still faces several limitations that current study can't overcome. First, certain art market data is difficult to obtain. Data relating to private transactions and gallery sales are usually kept confidential. It is used to protect the buyer's information and the artist's reputation. However this approach inevitably limits the scope of analysis and the comprehensiveness of research findings. Second, when measuring non-financial motivations such as personal emotional attachment still face methodological challenges. The emotional factors are often difficult to capture through traditional number indicators. Therefore unable to provide a precious indicator of their value. Third, while case studies offer valuable in-depth insights, their conclusions may not be universally applicable across different geographic regions or art categories. This research mainly focuses on the data from western market and it might not be less applicable when applying to other non-western markets. Some unforeseen factors such as market turbulence, regulation of certain genres of artwork, or even shift from cultural trends might all have different levels of affect to the market. Future research will focus on refining the model and the results of this study.

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