When art objects are considered part of an investor's portfolio, over collecting can become an issue. Too much invested in art can mean too little placed in other financial assets, resulting in an unbalanced portfolio.
In a day when art objects are considered part of an investor’s portfolio (especially for high net worth individuals acquiring assets of $20 to $30 million and above), over collecting can become an issue. Too much invested in art can mean too little placed in other financial assets, resulting in an unbalanced portfolio.
If this happens, some might call this collector is overenthusiastic. Others might term her or him obsessive or even a hoarder.
A research team at King’s College London is looking into these differences.
Ashley Keller, a PhD candidate researching hoarding at King’s College, believes there are certain characteristics that distinguish hoarding from collecting. The biggest difference is levels of organization: collectors engage in “ritualistic behavior around organizing their items,” she explains, “whereas with our hoarders we see a much more indiscriminate acquisition process, and this emphasis on organization just isn’t there.”
The second distinguishing feature is distress.
“Most of the collectors we see are enjoying their behavior even when they’re acquiring quite a bit… Whereas for hoarders, while they may enjoy getting the items and they may enjoy talking about an individual item, the overall behavior is very destructive and it’s very unpleasant for them.”
However, one of the most intriguing findings from the research on hoarders and collectors at King’s College was that collectors tend to have larger property sizes than hoarders. Keller says that there are two conflicting interpretations for this.
“Either hoarders tend to have smaller properties because they are functioning less well — unlike collectors, they are suffering from a prolonged psychiatric condition so their career suffers or they stop working at all. Or, because one of the criteria for being a hoarder is that your living space is impeded, it takes longer for someone with a big home to reach that stage.”
While this research is well and good, I, for one, am satisfied with a simpler explanation. As one of our hosts at Buckhorn, a large outdoor sculpture park near Pound Ridge, N.Y., explained to us during a recent visit: “If you collect to decorate, you are a decorator. If you collect beyond that, you are a collector.”
To me, the latter means a lot “of stuff.” If it is valuable and something that others would like as well, it is considered a collection. Hoarders, on the other hand, fill their home too, but with a lot of worthless objects — junk. Therefore, by this definition, a hoarder cannot be diversifying her portfolio.
First of all, she probably doesn’t have one. Secondly, since what is valuable to her is not to others, she can’t sell it to for a potential profit. This is the very basis of using art for diversification.