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Art is the worst performing collectible

The headlines of the past year would make you think that art prices are exploding. There was the $142 million Francis Bacon painting, the $58 million balloon dog and the $1 million Picasso cigar.

But those pieces represent a tiny slice at the top of the art market. When you look at values in the broader art market, the picture becomes a little less flattering. (See this piece by James Stewart in The New York Times for the best analysis.)

According to a new report from Knight Frank and WealthInsight, fine art was the worst performing collectible last year, with prices down 3 percent. The performance is based on an index from Art Market Research, which includes old masters, European 19th century, impressionists, modern and contemporary.

(Read more: 10 priciest real estate markets)

The report said the overall art market is still down from its 2011 peak. Granted, over a 10-year period, art is still a good investment, according to the report, with a return of 193 percent.

Artist Jeff Koons poses beside one of his works, "Balloon Dog," on display at Chicago's Museum of Contemporary Art.
AP
Artist Jeff Koons poses beside one of his works, "Balloon Dog," on display at Chicago's Museum of Contemporary Art.

And art is still popular with the wealthy, since many see it as more than a financial investment. The survey showed that among people worth $30 million, art is "growing in popularity" among 44 percent of them—making it the most popular class of collectibles.

Art was followed by wine and watches—suggesting that pleasure matters more than profits when it comes to collecting.

(Read more: 'Pocket porn'—X-rated watches worth millions)

So if art was the worst investment last year, what was the best?

Cars were the best performing collectible in 2013, up 28 percent. Cars are also the top performer over a 10-year period, up 456 percent.

(Read more: For ultrarich, '13 was an excellent year)

Here is the full list of collectibles and their returns from 2012-2013:

Collectible market growth

Rank
Type of collectible
Percentage of increase
1 Cars 28%
2 Coins 10%
3 Stamps 5%
4 Watches 4%
5 Wine 3%
6 Jewelry 3%
7 Chinese ceramics 3%
8 Furniture -2%
9 Art -3%
Source: Knight Frank and WealthInsight

—By CNBC's Robert Frank. Follow him on Twitter @robtfrank.

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