You’ve probably read over and over again that a diverse portfolio is a crucial step to being a successful investor. Putting all of your time and money into one investment is not only a risky move, but it is one that could end in a total disaster for your finances.
Between stocks, bonds, mutual funds, penny stocks, and everything else happening in the investment world, you may think you have all your bases covered and a highly-diversified portfolio. Maybe you do. However, there is one type of investment that you probably never thought about, but should give some attention to – art investments.
Art is a powerful investment to consider. The idea of art spans throughout all of our history, from Leonardo da Vinci to the latest artist creations that you may not understand, art is always around us. In fact, a report on the Art and Finance Industry done in 2017, expects the industry to reach $2.7 trillion by 2026.
It’s safe to say that the art industry is booming.
Why is this so important now? Well, economists worry that another recession to hit the markets in 2020, one year from now. Even if the predictions don’t come true, it’s never a bad idea to check your portfolio and ensure it could withstand a recession. Adding in a few art investments may do the trick.
As with any future investment, though, it’s critical that you do some research before making your decision. A good investment rarely comes from a random selection. Even though the art market is growing, that doesn’t necessarily secure a win.
So, does this have you thinking about investing in art? It should, and if it doesn’t, the following four points may help shed more light on the possibility of art investments being some of the best investments available.
The History of Art Investments Persevering
Since the start of the 21st century, we’ve seen the markets fluctuate significantly, so much that the 2008 market crash is named the Great Recession, and is considered the worst recession since the Dirty Thirties.
During the 2008 crash, art is one of the industries most noted for how quickly is bounced back compared to everything else. Those who had a portfolio that had multiple art assets weren’t hit nearly as hard as those who had no art investments. With art being a tangible investment, it withstands against market fluctuations better than stocks and bonds.
Investors are turning to art for more than a masterpiece to hang in their homes. They are looking at art as a way to diversify and secure their portfolio for any pending crashes. In 2014, 58 percent of wealth managers said their clients looked into investing in art. That number jumped to 73 percent in 2016.
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Art Has Value
Have you ever noticed when someone buys a painting from centuries ago, the price tag is astronomically high? That is because art doesn’t just have value to it today; it continues to grow in value over the years. Moreover, the better the artwork is from someone well-known around the world, the more it’ll cost you.
Much of the artwork you see from contemporary artists today speak about societal and political issues faced around the world in the past decade or so. Those pieces of art tell a story of what the world was like in our time. Just like artwork from the 15th century reveals a story from back then, so too will art from 2019 show a story in 200 years.
It’s More Doable Than Ever
Investing in art is more doable than ever before. That is because there are now companies that focus solely on allowing investors to invest in masterpieces. Companies like Masterworks have made art investment not only for the rich and famous anymore. Now, anyone can invest in art and diversify their portfolio like never before.
You’re Helping an Artist
If the value of art doesn’t strike a chord in you to invest, consider the emotional side of it. The art piece you’re considering to purchase as an investment, that is coming from someone who does it for a passion and their livelihood. In return, you’re helping out the artist that is providing you with an investment opportunity.
For the art world, the struggle is seriously real. A 2017 survey found that over three-quarters of the artists reported making $10,000 or less per year from their art. Every art investment you consider is likely to help out an artist more than you can probably imagine.
The Bottom Line
In the end, art investment is not for everyone. However, it is a whole new world of investment opportunities to consider. With the looming fear of an upcoming recession, having options to diversify your portfolio in as many ways as possible will help secure you and your money.
With companies like Masterworks, you now have the option to invest in art no matter how rich you are. Take advantage of this opportunity and protect your portfolio. Learn more about the possibility of investing in art and how you can make money doing so.