How To Invest In Art | MyArtBroker | Article (2024)

FAQs

How do you learn to invest in art? ›

You can start investing in art by visiting online auctions, going to art fairs, or even signing up with a fractional platform like Masterworks or Public to purchase shares of art. If you're interested in digital art, buying through an NFT platform can be one way to start investing in art.

Masterworks is a legitimate company that can help you invest in art, but there are no guarantees that the singular pieces of art you invest in will take off. In that way, it's similar to investing in individual stocks, since there is no guarantee that a single company will outperform in the future.

100% Art Ownership. This is the most traditional way to invest in art, where an individual or organisation purchases a piece of art and becomes the sole owner. This can be done by buying art on the primary or secondary market via an auction house, or privately, through an individual, dealer, brokerage, or gallery.

Investing in art by blue-chip artists like Pablo Picasso, Vincent van Gogh, or Andy Warhol can provide a solid foundation for your art investment portfolio. Their artworks often appreciate in value over time, making them a relatively safe investment option.

Art is a great investment for anyone looking to add value to their portfolio, by setting clear goals, doing your research and seeking the help of a professional you will be well on your way to acquiring a desirable work of art, adding value to your estate for generations to come.

Unproven business model: Many of Masterworks' features are untested. In other words, success isn't guaranteed. The platform says it may have to auction off artwork if its business model fails. Issuers are un-diversified: Investments with single-asset issuers can be risky since you're investing in a single piece of art.

The standard minimum to invest with Masterworks is $15,000, but you may be able to get a lower minimum for your personal account during your new customer onboarding call.

Art is Risky

Art is often seen as a relatively safe investment due to its limited physical exposure and lack of liquidity. However, it still has its risks and can be volatile. Any investment has the potential to succeed or fail. When the fair market value of a piece is not established, buyers may overpay for art.

If you don't have that kind of money to invest in art, there's another way to get access to this alternative asset class: fractional shares. Platforms like Maecenas and Masterworks allow you to purchase fractional shares, or slices of valuable works of art. Investors can open an account with as little as $1,000.

One key motivation for billionaire art collectors is the belief that art can be a store of value and a hedge against inflation. In times of economic uncertainty, many wealthy individuals turn to tangible assets like art as a way to protect their wealth.

Is there an art ETF? ›

Currently, there is no such thing as a publicly traded fine art ETF. However, alternatives exist that offer a similar type of investment vehicle. This blog explores key points to consider, as well as potential benefits and risks involved in art investment alternatives.

Understand the art market

But the illiquidity of art and a thinly traded market can make art a riskier investment compared to stocks, says Liz Jacovino, a wealth strategist for RBC Wealth Management-U.S. based in Connecticut.

Investing in art can be risky due to its illiquid nature and high transaction costs. However, it can also offer substantial returns if you invest wisely. According to a report by Art Market Research (AMR), contemporary art has delivered an average annual return of 7.5% over the past 25 years.

Start small, and build

Many artists price their smallest works in the $100 range, and these provide an excellent place to begin your collection. Rather than investing $1000 in a single larger piece, you can purchase numerous smaller works with the same amount.

Commissioned Work

One of the easiest ways for beginners to earn money is through commissioned work. It can be a portrait, pet portrait, illustration, or custom artwork. Artists will be able to use Instagram, Facebook, and Twitter as platforms to display their portfolios and lure potential clients.