Alternative investments can seem like a woo-woo way to earn money — but shove that thinking aside. Here’s one way to invest that can make a huge impact on your portfolio: Invest in blue-chip art.
More specifically, invest with Masterworks.
What is Masterworks?Masterworks is an investment platform for art. You can purchase shares that represent partial ownership of a painting from big-name artists like Banksy or Basquiat.
Masterworks selects artists believed to have favorable risk-reward profiles and puts up the capital to purchase the paintings. After it files a circular with the Securities and Exchange Commission (SEC), investors like you can invest in shares. When the painting is sold, investors share in the profit and loss like any other investment vehicle.
One of the best Masterworks is its unique gallery located in SoHo, New York. Not only can you invest in a masterpiece, but you can also visit said masterpiece and enjoy its beauty. When paintings aren’t on display in the gallery, they’re stored at Delaware Freeport, a 36,000-square-foot, climate-controlled art storage.
It holds paintings for 3 to 5 years to allow for appreciation. But investors can make an offer at any time. When a painting is sold, net proceeds are distributed by share.
Data-Based DecisionsNow, just because an investment in art evokes feelings doesn’t mean it’s based solely on emotion. Masterworks’ assessment of historical appreciation rate and risk is based on historical auction data collected and analyzed by its research team.
Once an artist is chosen, the team focuses on the ideal piece from that artist to increase the odds of demand when it's time to sell. The team analyzes the global collector base, artist appreciation rate and the volatility of each individual artist’s market.
The company maintains a database of all its artists and paintings accessible to anyone. I can jump on and look up the return on thousands of paintings and artworks.
The Masterworks Insights blog is much more than just a self-promoting spotlight. You can learn more about adding art to your portfolio and compare your art investment with the other options on the market.
About MasterworksMasterworks is based in New York City and offers a second location in Boulder, Colorado. Its team has more than 75 combined years of art collecting experience. Team members have even founded companies worth more than $1 billion.
The company, established in 2017, employs 17 people. It’s the 1st company that allows investors to purchase shares representing ownership of great masterpieces.
How You Can Get StartedYou have to request an invitation through Masterworks’ website to get started. Masterworks requires a phone interview before you are accepted as an investor. This can seem like a hassle if you’re used to quick online applications, but what Masterworks offers is more than just a transaction.
If you ever decide you need to get rid of your shares, Masterworks has also launched a trading platform. You can sell your shares to other investors through its bulletin board feature.