When most people think of investments, they think of stocks and bonds. It wasn’t until recent years that art became a key form of investment. In fact, art can be a great way to diversify a portfolio. Art itself is a tangible asset, giving you a physical possession even if the market value of the assets fall. Unlike stocks, art prices don’t rise and fall throughout the day. You may not see a return for years, but the returns are much larger than you’ll find in any stock or bond market today.
In the past, art investments signified a person’s wealth as only (Ultra)-High-net-worth individuals could own integral pieces of art. However, as artists began to realize the potential in selling their works, art auction houses became more popular. Art became not only a way to show off your wealth, but also a way to make money that’s less volatile than the traditional stock market.
Today, you don’t have to go to Sotheby’s to bid on art any longer. The internet has transformed the world of art and its investment capabilities. Average investors can invest in entire pieces or one small piece of art, and consider themselves an art collector.
Investing in Art
Today, investing in art is more than buying expensive paintings and selling them just to make a profit. Investing in art isn’t just for the "wealthy,"" thanks to tokenization or fractional ownership which allows investors to buy small shares of a work of art. The shares gives the artist liquidity to create new art, furthering the shareholders’ investment in the art.
Investing in art has a social impact that many investors want to achieve. Owning art gives investors an "elite status" that many want to achieve but sometimes can’t afford. With crowdfunding and blockchain technology, more investors can put their money in art without investing more than they can afford. Owning a piece of an art sculpture or painting or a digital version of it is the new face of art. While you won’t find art traded on the stock market (until the current moment!) or in a fast-paced environment as you’d find in day trading, there’s something to be said about the future of art investing.
Just how is this possible? It’s possible with a variety of digital solutions.
Below, learn more about the different types of new disruptors:
- AXS Art – Targeting millennial art collectors, AXS Art brings together collectors and artists that may otherwise be unknown. With little overhead by operating online only, AXS ART makes art affordable for anyone. Little-known artists get exposure and potential investors have access to more affordable pieces.
- AucArt – Another online platform bringing together potential investors and little-known artists, AucArt brings "outsiders" into the art market. The contemporary artists are those in their final year of their BA/BM degree or have graduated within the last three years. The digital art platform gives investors initial exposure to incredible artists.
- Unit London – This platform for up and coming artists helps artists find their voice in the world. Unit helps artists enhance an artist’s audience while exposing a larger audience to contemporary art. Using social and digital media, Unit tells a story of incredible artists that bring investors and artists together.
Disruptive players (Crowd Investing)
- Arthena – Arthena removes the traditional barriers to investing in art. This art fund gives access to more investors than would otherwise have the capital to invest in art. Arthena brings transparency and affordability to art investments. With a minimum investment of $13,000 rather than the traditional $150,000, this crowdfunding source gives access to art investments to a larger pool of investors.
- Feral Horses – Investors have the option to invest in artists themselves or in tokenised shares of individual pieces. Investments start as low as £5 and overall values tend to stay below £100,000 for maximum dividends returns.
- Maecenas – Investors can invest in art without the middle-man. Artists can raise funds from multiple investors, putting up their art as collateral. This gives investors a transparent way to invest in art while giving artists the liquidity they need to keep creating. One piece of artwork may have thousands of investors (digital certificates) much like a share of stock. Investors can buy and sell shares in the Maecenas marketplace for further liquidity and investments.
- Masterworks – Investors have another opportunity for investments with Masterworks. Investors can purchase shares of individual pieces of art, investing as little or as much as they want starting at just $10.000.
- Look Lateral – Selling fractional ownership of art pieces, Look Lateral is member-owned and controlled. The platform is available for individual artists as well as museums and galleries to show off their collections and invite more investors from around the world.
- Anthea – Artists that want to invest in a single art fund should consider Anthea. Investing in post-war and contemporary art, there are currently 13 artists in the fund. Some artists are emerging while others are established, giving diversification to the fund itself. With almost a 24% increase and 10% return during its initial launch, Anthea shows promise for potential art investors along with its artists.
- Magnus – Magnus set out to enhance the transparency of the art market. The Magnus app brings together emerging and established artists with potential art collectors and investors. The app showcases prices, galleries, and history of pieces of art to give investors true transparency and a greater likelihood of success.
Today, anyone can invest in art, even if they don’t know anything about it. Of course, you’ll want to educate yourself as much as possible to enhance your returns, just as you would invest in the stock market. If you’re looking for a way to diversify your portfolio or are just bored with the standard stocks and bonds, consider investing in art via one of the up and coming digital and social media apps making it easier to connect artists and investors today.
- Art as an Investment? A Survey of Comparative Assets; Melanie Gerlis (Lund Humphries)
- Big Bucks: The Explosion of the Art Market in the 21st Century; Georgina Adam (Lund Humphries)
- Fine Art and High Finance: Expert Advice on the Economics of Ownership; Clare McAndrew (Bloomberg Press)
Website and the information contained herein is not intended to be a source of advice or credit analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.