Investing in art can be a unique and exciting way to diversify your portfolio.
With the art market being worth an estimated $64.8 billion globally, investing in art can be an excellent way to grow your wealth and appreciate the beauty that surrounds you at the same time.
Investing in art may seem intimidating initially like when investing in the stock market, but with a little guidance and smart moves, you’ll be a pro.
That’s why we’ve put together this guide just for you, to help you start your art investing journey.
How Do Art Investments Work?
Art investments work by purchasing pieces of art that have the prospect of increasing in value over time. This value is determined by several factors, including the artist’s reputation, the rarity of the piece, and the demand for that type of art.
When you invest in art, you are essentially betting that the value of the piece you’ve purchased will increase over time.
As an alternative investment, there’s no guarantee that the value of a piece of art will go up, but many art investors have seen significant returns on their art investments.
For example, in 2018, the top 10 most expensive paintings sold at auction had an average return of 19% per year over the previous decade.
How To Get Started Buying Art
There are different ways you could get started with buying art, but I’ll highlight some of the best ways to walk yourself around the block concerning this.
Visiting local art galleries is a great way to start learning about the art world and building your collection. You can talk to the gallery owners and art collectors to get their insights on what’s popular and likely to appreciate in value.
If you’re looking to invest in more high-end pieces, auction houses like Sotheby’s and Christie’s are great places to start. These houses often have auctions dedicated to specific renowned artists or art styles, so you can get a sense of what’s in demand and what prices are being achieved in secondary markets.
Art fairs are large exhibitions that showcase the work of a variety of up-and-coming artists’ original pieces. This is a great way to see a wide range of art in one place and get a sense of what’s popular in the art world.
Non-fungible tokens are assets that represent ownership of a unique piece of artwork from sometimes famous artists. NFT marketplaces like Nifty Gateway and OpenSea are great places to invest in digital art and to get a sense of what’s possible in this new and exciting area of the art market.
The Easiest Way for Beginners To Invest in Art
If you’re just starting out, platforms like Masterworks and Public are great options for individual investors or retail investors in art. These platforms allow you to invest in high-end art pieces for a fraction of the cost of buying the piece outright.
Take a quick look at our Masterworks review for more insight about the platform.
Let’s dive into why using a fractional art investment platform might just be the best option for you as a beginner:
- Firstly, someone else has done the hard work for you! They’ve evaluated the artwork and made sure it’s worth investing in.
- Secondly, you don’t need to break the bank and buy an expensive piece of blue-chip art. You can start with an amount that fits your budget and makes sense for your investment portfolio.
- And finally, with a platform that allows you to trade or sell shares, you’ll have a sense of liquidity. You don’t have to stress about how to sell the entire piece of artwork if you need to.
Frequently Asked Questions
Is fine art a good investment?
Well, the answer to that depends on your perspective. Investing in fine art could be a great investment if you have a good understanding of the art market and know how to pick winning pieces. But remember, it’s not for everyone, and investing in art always comes with a risk tolerance. There’s no guarantee that past performance or fractional shares will repeat itself in the future.
How do I get started in art investing?
There are a ton of options for you! You can check out online auctions, go to art fairs, or sign up with Masterworks, which specializes in fractional art investing.
How much can I invest in art?
The amount you need to start investing in art varies widely depending on what you decide to buy. If you’re looking to buy a famous masterpiece, you could be looking at millions of dollars. But if you’re looking to get started in fractional shares art investing, you could start with a minimum investment of $1,000.
Investing in art can be a unique and exciting way to diversify your portfolio and appreciate the beauty surrounding you.
From visiting art galleries and auction houses to exploring the NFT marketplaces, the opportunities for investing in art are vast and varied.
Whether you’re looking to invest in a specific artist or style or diversify your portfolio, art can be a great investment choice.
But keep in mind that this is a long-term investment, so it actually takes some time before you start benefiting from what I’ll call the art’s financial markets.