With stock markets being a gamble and savings fetching low returns, those with the extra moolah are adding art to their portfolio, in order to make more profits with less risk.

"Art has the ability to reduce the risk of a portfolio when combined with the other assets. Besides it combines passion and investment," argues Neville Tuli of Osian, a premier Art Auction House and Archive.

The lure of the art market lies in its low correlation with other financial assets. Despite the collapse of many financial markets, the fine art market has stayed buoyant over the years, he says.

• How to become an art millionaire
• 4 tips on investing in art
• Now, you get loans to buy art

"From 1875 to 2000 art has outperformed fixed income, but underperformed equities. And in the 4-5 years of stock market losses, art has outperformed equities," he says, quoting from the research done in the field of contemporary art.

"It is a genuine contender as part of any sophisticated asset planning. However, art should be seen as an alternative investment, earning capital gains rather than a dividend," Tuli elaborates.

Though it has been an attractive investment option for many decades, of late the process is getting formalised and institutionalised, thanks to market forces coupled with serious buyer interest, contends art curator Dr Alka Pande.

An ever-increasing demand along with a limited supply of quality art and its ability to survive economic downturn makes art seems the right place to park your cash, Tuli reasons.

"Art is a scarce product, not reproducible at will. Rising incomes over the long-term ensure a steady rise in demand for works of art against falling supply.

• Have you insured your art collection?
• Indian art rakes in the moolah
• The booming Indian art market

"Discrimination-levels have reached a threshold where collectors are willing to pay higher premiums to acquire the best works of art. Crossing this aesthetic-knowledge barrier has been a key driver for exponential pricing globally. The Indian market is at an infant stage, and the markets for at least 75-85 significant contemporary Indian artists remain way below sustainable equilibrium levels," Tuli cautions.

When it comes to pricing, Tuli says, "There is no objective value for works of art."

"Prices follow income growth and evaluation according to taste. Those items, which become the focus of a change in taste later, generate the highest yields. Anti-cyclical investment is thus the hallmark of the successful investor."

Some factors that drive the market include growth in the purchasing power of upwardly mobile Indians and Non-Resident Indians and greater knowledge base of links between artistic historical significance and pricing of art.

Tuli says that a change in attitude of financial institutions would go a long way in making art a genuine asset. For starters art must be viewed as collateral. The institutions should be willing to give loans for purchase of art akin to loans given to buy cars or homes and they should be willing to insure art.

Padmashree award-winning artist Satish Gupta doles out some tips to those wishing to invest in art. He says that one should establish the provenance of the piece to ensure it is not a fake and understand the artist, his medium, body of work and his best periods. "Not all the works of an artist are great."

Gupta also cautions against buying work that is cracking or fading.

Explore folk art for great returns, Pande advises. Painter Sanjay Bhattacharya says, "It is important to buy only what you like. Trust your instinct."

As Tuli says philosophically: "In the end, as beauty lies in the eyes of the beholder, so does the value of art."