The annual London Frieze Art Fair kicked off this week at an odd time for the art market. Broadly speaking, prices have recovered from the financial crisis. The broad Art 100 Index fell one-third between its peak in 2008 and its post-crisis trough early last year, but is almost back to its peak and has been unaffected by the financial market turbulence of the past few months, says Art Market Research.

But though the asset class has whacked the S&P 500 for returns during the past five years, there is more to the art story than that.

Art investors’ precise taste has been critical. For example, prices for European Impressionists, such as Monet and Renoir, surged almost fivefold in the two years before Lehman collapsed (just as they did in 1989 before the Japanese stock market peaked) but lost almost all those gains shortly afterwards. They are down 10 per cent in 2011. However, Modernists such as Picasso and Matisse are in vogue. Prices for these works have gained about one-fifth in 2011.