Every investor knows the importance of diversifying their portfolio to maximize their returns on investment, but just how diversified do you want to be? Should you branch out into cryptocurrencies, wine, livestock or other unconventional investments to lower your risk and boost your likelihood of substantial gains?
While some non-traditional investments may be too risky and volatile for the average investor (especially cryptocurrencies in many instances), fine art can be a surprisingly lucrative investment. The only problem is that throughout history, investing in fine art was almost always limited to those wealthy enough to purchase multi-million dollar masterpieces.
Nowadays, Masterworks.io is attempting to tear down old barriers to art investments by offering everyday folks the opportunity to invest in blue-chip artwork from incredible artists like Monet, Picasso, and Andy Warhol.
Masterworks.io was founded in 2017 and is presently run by investment pros (including the co-founders of Betterment and Fundrise) and art enthusiasts with more than 75 years of art collecting and investing experience amongst themselves.
This is a great opportunity for less well-off investors, since the Art Basel & UBS Art Market 2018 Report found artwork worth $1 million or more represented 64% of total global fine art sales in 2017, which suggests that fine art and collectibles trading is unlikely to plateau or decrease in popularity any time soon.
Needless to say, Masterworks.io has a grand plan and solid team of professionals to help investors get more involved in the world of blue-chip artwork. There are few, if any, investment companies or online platforms that offer such unprecedented access to enormously valuable artwork, so if you’ve ever considered investing in art, then Masterworks.io might be an excellent addition to your portfolio:
Why Invest in Art?
Investing in fine art is much more of a long-term capital gains strategy compared to traditional investing. Whereas the value of a stock can rise and fall throughout a single day of trading, artwork tends to increase in value on a long-run timeframe.
This means that you can’t really expect to make a quick profit then move on to the next piece of artwork – it requires a decent amount of research and specialized market research to determine whether a piece of art is worth investing in.
The reason why ultra-wealthy folks choose to add fine art to their portfolios is because this investment asset class has a reasonably stable track record of producing noteworthy gains. As Artsy explains, trading based on non-public information – which is illegal for most traditional stock and bond investments – is one of the most important drivers of gains in the world of art investments.
This can be confusing for investors accustomed to the normal operations of stock/bond trading, but working closely with companies like Masterworks.io can help you overcome these initial challenges when considering a new investment asset class for your portfolio.
Own a Share of Fine Art
With Masterworks.io, you will not be hanging an original Picasso painting in your home any time soon, but you can own a share of a Picasso work. The process is relatively straightforward: Masterworks.io analyzes relevant data (sales, historical appreciation rates, market value, etc.) and purchases a piece of art through an auction or art seller for below fair market value.
Next, Masterworks.io files for a public offering with the SEC. Once approved by the SEC and FINRA, Masterworks.io investors can purchase shares in the artwork for $20 per share (sometimes there’s a minimum number of shares required for investors to get access to the artwork). Finally, you’re able to monitor the value of your artwork using Masterworks.io’s advanced data analytics platform.
Voting Rights as a Shareholder
When many different people own shares in the same piece of art, how do you navigate the negotiation process when someone wants to purchase it? Much like other shareholder relations, you get to vote whether or not to sell the piece to an art collector. There must be a clear majority to ultimately sell the artwork, so the more shares you own, the more influence you have in the final decision.
Masterworks.io strives to keep a piece of art for 5-10 years before selling to maximize the potential for higher returns on the initial investment, but there’s always a chance you might be able to sell the painting sooner if there’s a viable offer and enough shareholders approve of the bid.
Should You Invest in Fine Art?
Investing can seem complicated, no matter what you’re putting your money into. When it comes to something that was once reserved for only the wealthiest members of society like fine art has been for centuries, it can be even more perplexing to try navigating the world of fine art investments on your own.
This is why Masterworks.io is so advantageous: they take the confusion and barriers out of investing in fine art and give everyday investors access to multi-million dollar artworks that they’d never be able to afford on their own. If you want to diversify your portfolio with a piece of history that has a strong capacity to produce high returns on investment, then Masterworks.io is a great place to start.