What Is Blue Chip Art?
What does blue-chip art mean? Is blue-chip art a worthy investment? What makes a piece worthy of a blue-chip art status?
You have come to the right place if you ever wondered about these questions and more on blue-chip art.
The art world is ever-changing, and it is also a vast and complex one, with every generation of artists, art collectors, financiers, critics and investors bringing their own style and approach to art, art-making, and art preservation. Today, there are many different types of artists — from avant-garde artists and surrealists to modernists and contemporary artists — and art, each with its own unique style, medium and form.
Blue-chip art is so named because the artist responsible for the work has already proven their mettle and themselves in the art world through consistent sales at different galleries or auctions. But that isn’t all there is to blue-chip art and blue-chip artists.
Keep reading to learn the nitty-gritty of blue-chip art and why it is causing a seismic shift in both the world of art investment and art-making.
Blue-chip art defined
Blue-chip art is a buzz phrase or term that is often used in the art world with respect to the value of art as an investment. In fact, the term blue-chip in and of itself is generally used in the investment, hedge fund management, or business financial arena to describe certain stocks, companies, products, securities, and other super-valuable assets that hold great potential.
For instance, some Wall Street pundits may refer to gigantic tech companies such as Apple, Microsoft, Alphabet, Meta Verse, TESLA, or Oracle as “blue chips” in reference to their ability to dominate the segment for a long time in terms of market capitalization, stock listing performance, and other financial metrics. In other words, these companies are worthy of your investment, especially in the long term.
The same is true of the term in the world of art. Otherwise put, blue-chip art is an art that has proven to be worth investing in, particularly for art financiers, collectors, or investors looking for great returns in the long haul. So, in respect to art, the phrase “blue chip” refers to either an artist, a piece of art, or a collection of artworks that are thought of as investment-grade, meaning that they have held a high value for an extended period of time.
In the world of business, the term “blue chip” is often used to describe the oldest or largest firms that have been performing exceptionally well for a long time. The means segment, industry, or market leaders whose valuation is globally accepted as high and consistent.
Along the same line, blue-chip works of art are the ones that have been produced by the most prominent and widely recognized artists, whose position in the auction market has been solidified by unprecedented sales volumes over the course of several years, if not decades. It is for this reason that these pieces of artwork are sometimes referred to as investment-grade art.
The term ‘blue-chip art’ was coined by the world’s first and most recognized pioneer commercial art dealer E. A. Carmean in 1928 while referring to highly-regarded pieces of artwork. The underlying assumption with blue-chip art is that its value will increase over time because it has consistently sold for higher prices than the market rate for similar items of lesser quality, and it has been shown to maintain these levels of price increases over many years.
What does the term blue chip mean?
The term “blue chip” (sometimes stylized “blue-chip”) is a buzz phrase that is frequently used by the financial sector, especially seasoned investors and edge fund managers, to describe a company, asset, investment or portfolio which showcases at least two major attributes:
- It is well-established in the market, meaning that it has proven its worth or value for an extended period. For this reason, a blue-chip company, investment, or asset isn’t speculative.
- It has a low risk of devaluation. In a nutshell, this is something that won’t suffer a substantial loss of value or worth any time soon, regardless of the economic upswings and downturns.
If you think about it from an investor’s point of view, a blue chip isn’t just a trendy investment. Instead, a blue-chip investment is a market-established asset or investment that holds great value. Not just that; this company, asset or investment is not likely to lose much of its value or worth in the long-term, meaning in the next five years, ten years, or a more extended period.
Although the phrase “blue chip art” has existed in the mainstream media for a brief amount of time, it has a long history in the art world. When the phrase was first introduced, people from the financial community wanted to zero in on artworks from talented artists in the aftermath of the economic downturn that occurred in the 1970s. Having seen their investments go nearly puff into the financial emptiness, these investors saw significant potential in evergreen and valuable artworks as an alternative to real estate, financial markets, and other traditional investment vehicles.
In their eyes, some art masterpieces were not prone to the changes in the economic climate and, therefore, could possibly protect forward-thinking investors from losing their net worths. E.A. Carmean coined the term “blue chip art” to describe these art pieces whose value doesn’t fall when the economy dips.
When it comes to the overall art space, blue chip, as a phrase associated with art investment, can be used to define several different aspects of the art community. Here are three primary use cases:
Blue Chip Art
When you talk about art or art form, blue chip is almost always synonymous with masterpieces—works of art that are recognized worldwide as near-forever valuable. As such, it is a phrase that is generally used to refer to a sculpture, installation, painting or other work of art that is listed as having a lot of value and is not likely to devalue in the future.
Within the gambling space, ‘blue chip’ usually refers to a type of special chip of the highest value at the poker table. Likewise, blue chip is typically mentioned in reference to a piece of art with immense value that’s dependably profitable and forecast to either maintain or increase its monetary value, no matter the downturns and upturns of the economy.
In many regards, blue chip artworks share two core traits: assured liquidity and top-notch quality.
You are probably wondering what kind of artwork qualifies to be deemed as “blue chip.” Here are some of the top blue chip artworks according to Artprice, the authority on the subject matter:
The Starry Night by Van Gogh (1889) – Vince Van Gogh is considered one of the most famous artists of all time and with good reason. The Starry Night (1889) is perhaps his most prized work of art. The oil on canvas painting features individual brushstrokes that are unique and meteoric in value.
Diego and I by Frida Kahlo (1940) – Never has a self-portrait painting exuded so much mastery and interest more than Frida Kahlo’s 1940 masterpiece Diego and I. The blue-chip artwork by the Mexican painter fetched a whopping $35 million at auction, and its value kept increasing year after year.
Second Voyage to Italy by Cy Twombly (ed. 1962) – Currently housed by the San Francisco MoMA, this masterpiece is often regarded as one of the most valuable blue-chips in the art world. Along with other Cy Twombly’s works, it has sold for millions at art auctions.
Black Sheep with Golden Horns by Damien Hirst (2009) – Works of contemporary art have gained coinage with most blue chip art investors, and this 2009 masterpiece is no different. It has attracted numerous bidders at auctions and the most recent winner nabbed it for a staggering $4.7 million. According to market rates, this piece is now worth more than $5.9 million, showcasing its potential as a blue chip art.
When Mark Rothko’s 1962 Orange, Red, Yellow fell at the hammer in 2012, it scooped a whopping £53.8 million ($86.9 million), making it one of the most valuable works of contemporary art to be sold at the auction.
Balder’s Träume (Balder’s Dreams) (1982) by Anselm Kiefer, was first shown in Venice. This straw, emulsion, acrylic, oil, and photo on canvas sold for $1.36 million at Christie’s New York more than one and a half decades ago.
Blue Chip Artists
As far as artists go, the term blue chip is often used to describe the star earners of the art market. These are perennial artists whose artworks fetch millions, or sometimes tens of millions of dollars, at art auctions. The phrase stems from the fact that these artists’ works usually sell at outstanding prices because investors, collectors, financiers, and the general public have confidence in their long-standing record of consistent earnings.
However you look at it, blue chip artists are the celebrities, icons, or pillars whose artworks’ value has been confirmed at auction and through consistent years, if not decades, of earnings in the art market. Therefore, early blue chip artists are upcoming talents whose works indicate great resale potential at auction.
That being said, the top 20 blue chip artists, according to Artprice, include:
- Pablo PICASSO (1881-1973; Modern artist)
- Andy WARHOL (1928-1987; Post-War artist)
- Claude MONET (1840-1926; 19th Century artist)
- Jean-Michel BASQUIAT (1960-1988; Contemporary artist)
- QI Baishi (1864-1957; Modern artist)
- Zao Wou-Ki (1921-2013; Post –War artist)
- Gerhard RICHTER (born 1932; Post-War artist)
- WU Guanzhong (1919-2010; Modern artist)
- Fu Baoshi (1904-1965; Modern artist)
- Amedeo MODIGLIANI (1884-1920; Modern artist)
- Roy LICHTENSTEIN (1923-1997; Post-War artist)
- Cy TWOMBLY (1928-2011; Post-War artist)
- Alberto GIACOMETTI (1901-1966; Modern artist)
- Lucio FONTANA (1899-1968; Modern artist)
- Marc CHAGALL (1887-1985; Modern artist)
- Alexander CALDER (1898-1976; Modern artist)
- Joan MIRO (1893-1983; Modern artist)
- Willem DE KOONING (1904-1997; Modern artist)
- David HOCKNEY (born 1937; Post-War artist)
- Yayoi KUSAMA (born 1929; Post-War artist)
Blue chip art galleries
When talking about blue-chip art galleries, we often refer to galleries (and sometimes museums or art collections) whose focus is on buying, marketing, selling, and reselling the artworks of blue-chip artists. In other words, these art galleries typically buy, sell, or commission works of art from artists whose repertoire in the art world has been proven beyond doubt.
The artworks carried by blue chip art galleries are rigorously authenticated, highly curated, and well-cataloged, meaning that they are most likely to hold their value or increase in valuation. The world of art collecting has evolved in recent years. It’s no longer just about expensive names on the walls of galleries but also includes online galleries with an eye for new media.
Here are some of the absolute ten best blue chip art galleries from around the world:
- David Zwirner Gallery: Three locations in New York City, as well as Paris, Hong Kong, and London
- Gagosian: Owns a whopping 20 blue chip art galleries spread across New York, London, Paris, Hong Kong, Geneva, Athens, Rome, Beverly Hills, and Basel)
- Hauser & Wirth: Locations in New York, Southampton, Los Angeles, Zürich, London, Somerset, Menorca, Monaco, amongst others
- Lisson Gallery: Locations in London, New York, Shanghai, Beijing and Los Angeles
- Massimo de Carlo: Locations in Milan, London, Hong Kong, Paris and Beijing)
- Perrotin: Locations in Paris, New York, Hong Kong, Shanghai and Tokyo
- Pace Gallery: Mine locations worldwide
- Sprüth Magers: Locations in Berlin, London, New York and Los Angeles
- Thaddaeus Ropac: Locations in Paris, London, Seoul and Salzburg
- White Cube: Locations in London, New York, Paris, Hong Kong and West Palm Beach
The place of blue-chip artworks in the art market
The line between blue chip and speculative artists can be blurry, but prices fetched at the auctions serve as a credible indicator in the art market. While you can expect to pay as little as $10,000 or even lower for a painting at the various art galleries in London, Paris, or New York, hoping that it’ll be valued at millions of dollars in the future, the odds of that happening are much akin to winning the PowerBall.
However, on the high end of the art market pricing spectrum, investment-grade artworks which have already been authenticated and confirmed to be worth a 6- to 8-figure valuation at auction show signals of much more predictable rates of appreciation in value. This is especially true if the artist has a well-established collector base.
The artists that fall into the highly coveted “blue chip” category are often unsurprisingly icons, stars, and household names with a consistent record of high-value sales at auction. In fact, the majority, if not all of these “blue chip” artists, have posted consistently high or record-smashing sales at auctions.
Stock market versus blue chip art
In some respects, investing in artworks by a blue chip artist is comparable to investing in stocks of a particular company. That’s because blue chip firms and artists have at least two qualities in common: guaranteed liquidity and high quality.
So, the juxtaposition of blue-chip art and the stock market makes the most sense when you look at equity indices like the S&P 500 and the Artprice100®. Accordingly, and much to everyone’s surprise, blue chip art investments have shown potential to be more stable and less prone to economic downturns than the S&P 500.
In fact, the stats assembled by ArtPrice have confirmed that over the past two decades, artworks by blue chip artists have accrued more valuation and outperformed the S&P 500 by well over 250 percent. In the fiscal year 2009-2010 in particular, the blue-chip art market ticked up in value by more than 44 percent, while the S&P 500 recovered to slightly less than 20%.
Do financial crises affect investments in blue chip art?
Another fascinating area of comparison between the art market and the stock market is their performance during the housing crash of 2008-2009. In the period in question, the stock market hit an all-time low of 57 percent, while the cumulative value lost by artworks of the top 100 blue chip artists was a commendable 27 percent. What’s even more interesting is the rate and strength at which the blue-chip art market recovered from the recession.
As with any investment vehicle, the last thing you want is to experience an economic downturn. From most of the figures collected by analytics companies, the financial crisis of 2008/09 did affect both the stock market and the blue-chip art market, with the global art market slipping by roughly 27 percent at the very onset of the recession.
On the other hand, the high-end of the blue-chip art sector might actually be partially immune to financial crises. So, if you are willing and can afford to fork over tens of millions of dollars for a masterpiece, you may not have to worry about economic ups and downs affecting your blue chip art investments.
As the economic growth slumps during to the raging coronavirus variants, the art market hopes that strong sales during recent auctions in Hong Kong, New York, Paris and London will help reinforce the perception that blue-chip artists like Francis Bacon, Jeff Koons, Gerhard Richter, and Andy Warhol are worthy assets. But, at the end of the day, there’s nothing like risk-free assets.