Is Masterworks Art Investing Worth It?

Jeremy BiberdorfBy: Jeremy Biberdorf

September 3, 2023September 3, 2023

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Ever dreamt of blending iconic figures like Picasso or Banksy into your investment portfolios? Historically, the vast art market seemed like a gated community for the ultra-rich. But, Masterworks changes that narrative.

They introduce a novel concept: fractional shares in art. Now, every individual investor can claim a piece of art worth millions of dollars without emptying their wallets. Through this alternative investment platform, the complexities of the art collector’s world are made accessible to everyday investors.

But, is this alternative investments platform the diversification tool your portfolio needs? Is Masterworks art investing worth it? Continue reading this Masterworks review to find out for yourself.
Learn More About Masterworks

What is Masterworks?

Masterworks is an innovative platform that merges the art world with investment opportunities. Founded in 2017 by Scott Lynn, its mission is to make fine art investment accessible to a broader audience. Beyond just collecting art, Masterworks emphasizes the safety of each investment. They ensure that every artwork is well-insured and stored securely.

Today, the platform boasts over 400,000 art investors. They continuously add to their collection, introducing new high-quality artworks almost every week. This active acquisition is driven by their unique data, which helps pinpoint artists with promising investment potential.

At its core, Masterworks focuses on sharing contemporary art with its investors. They own over 200 pieces from renowned artists, including Banksy and Andy Warhol. The company takes care of everything – from buying the art to storing it, insuring it, and selling it. When an artwork sells at a profit, investors share the net gains.

Specializing in post-World War 2 contemporary art, they believe these pieces have the best chance for value growth. With a user base exceeding 650,000 and backed by Scott Lynn’s expertise as both an online marketer and art collector, Masterworks is reshaping the way people invest in art.

Masterworks Pricing

Masterworks is known for its clear fee structure. Investors can appreciate the fact that there are no fees when making an initial investment in an artwork or when selling shares to another party on the platform’s secondary market.

However, users should be aware of two main costs. Firstly, there’s a 1.5% annual management fee calculated based on the total account value, which is taken directly from the equity each year.

Secondly, when an artwork is sold, Masterworks claims 20% of the profits. This fee encompasses various services such as art management, storage, insurance, appraisals, and necessary SEC regulatory charges.

Is Masterworks Art Investing Worth It?

If you’re an experienced and active trader looking to diversify your investment portfolio, Masterworks could be a solid choice. It offers a unique opportunity to invest in top-tier art markets by purchasing shares, with the possibility to resell them later on a secondary market.

However, this isn’t a quick flip: investments might require a hold period ranging from three to 10 years based on the art you choose. On the downside, those who prioritize liquidity or are risk-averse might want to think twice.

It’s not a platform for the faint-hearted or those wanting quick returns. Yet, for investors keen on diversifying, and potentially hedging against inflation, Masterworks offers a distinctive edge.

Masterworks Features

  • Quality Art Research: Navigate the robust art market with Masterworks. They provide a price database bustling with contemporary art prices, enabling you to deep dive into artist markets, analyze purchase prices, and get ahead with stellar investment opportunities.
  • Only the Best Art: Ever dreamt of holding a stake in the marvels crafted by legends like Picasso or Basquiat? Masterworks specializes in blue-chip art, offering fractional shares of renowned pieces, creating a bridge between everyday investors and the illustrious world of high-value artworks.
  • Talk to the Experts: In an era where automation reigns, Masterworks stands out. Dial them up, and there’s an art specialist on the other side, ready for a phone interview, eager to align your investment portfolios with your aspirations and risk appetite.
  • Smooth Digital Experience: Whether you’re an art aficionado or someone looking at alternative investment platforms, Masterworks’ interface is a breeze. Their website and mobile app are thoughtfully designed, ensuring that both initial investment decisions and subsequent portfolio management are straightforward.
  • Educate and Empower: Art investing might seem like uncharted territory, but Masterworks ensures you’re not sailing blind. Their reservoir of educational resources – videos, articles, podcasts – is aimed at turning everyday investors into informed art investors.
  • Commune and Engage: In an age where community is king, Masterworks doesn’t falter. Their presence across social platforms, from Twitter to LinkedIn, fosters a network of art enthusiasts.
  • Transparent Fee Structure: No one likes hidden costs. Masterworks boasts an upfront annual management fee.

Final Thoughts

In an evolving financial landscape, art stands out as an intriguing alternative asset class. While mutual funds, hedge funds, and the likes have their place, art investments offer a unique allure, capturing the beauty of famous paintings and the dynamics of contemporary art prices.

The Masterworks mobile app and online platform make it easier than ever to navigate artist markets, view current offerings, and make informed decisions about the purchase price of pieces of artwork. Their educational resources ensure that the average investor is well-equipped with the knowledge to evaluate the historical returns and investment potential of different art pieces.

However, as with any investment platforms and strategies, it’s imperative to understand the risks. Art, as an asset class, can be less liquid than traditional investments like stocks. Potential investors should be cautious, understanding that the return on investment may vary and that the art market’s ebbs and flows can influence share prices and future profits.

For those intrigued by the blend of culture and finance, Masterworks offers an innovative approach to art investments. It might just be the alternative asset class you’ve been seeking. If you want to begin your journey into Art investing, click here to get started today.
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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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