The following is a sponsored post in partnership with Masterworks. Please read Masterworks’ disclaimer.
There are so many different ways to invest, and one that I recently found that is interesting is Masterworks.
Masterworks is the first art investment platform that allows you to invest in the world’s most valuable art, such as ones completed by Andy Warhol.
Yes, you invest in art and paintings with Masterworks – sounds interesting, right?
Masterworks has been featured on many publications such as:
- CNN’s How art ‘shares’ could make you a Warhol collector for just $20
- Forbes’ The New Art Economy: How Would You Like To Own A Warhol?
- Techweek’s Invest in Claude Monet with Masterworks’ Art Stock Exchange
If you’re looking to diversify your portfolio, this may be an interesting platform to look further into.
Usually, investment portfolios are limited to the stock market as well as bonds, with the occasional person being invested in real estate as well (such as rental real estate).
However, according to Deloitte’s 2017 Art and Finance report, 88% of wealth managers say art and collectibles should be included as part of their investment portfolio. Fine art has also outperformed the S&P 500 by over 180% since the year 2000!
While art is not a part of my investment portfolio currently, I do know how important it is to be diversified.
And, currently, I’m not well diversified outside of my investment portfolio with Vanguard.
This is on my to-do list currently, and I am researching different options for how I can diversify right now.
Art has been an asset that has been used by the extremely wealthy for a very long time, however, Masterworks is now giving everyday people the option to invest in valuable art that has increased in value over time.
According to The Wall Street Journal’s The Best Investments of 2018? Art, Wine and Cars “Investors who put money into art at the beginning of the year saw an average gain of 10.6% by the end of November, according to Art Market Research’s Art 100 Index, the closest thing the industry has to a benchmark. Investors who put money in the S&P 500 at the beginning of the year have lost 5.1%, based on estimates of total return.”
Related: What is Value Investing, and Why Should You Care?
How does investing with Masterworks work?
Masterworks’ platform is quite easy to understand. Here is how this investment platform works:
- Masterworks purchases multi-million dollar paintings – They review hundreds of possibilities each year and find great pieces to invest in by blue chip artists.
- After they purchase a painting, they file it as a qualified securities offering with the Securities and Exchange Commission.
- You can invest in art directly on the Masterworks website for as little as $1,000 to start with.
Masterworks does have a fee – they charge 1% annual to cover management fees (such as storage and gallery space, insurance, expenses, etc.). Masterworks also earn 20% of the profit only once the painting is sold.
So, how does an investor like you and me make money with our investment?
There are two ways to make money on your investment. Below is what Masterworks says about this topic:
- “At any time, a collector can make an offer to buy a painting that you’ve invested in. As a shareholder, you can vote with others and decide whether to sell. If the painting is sold, your share of the proceeds are distributed to you.”
- “We seek to facilitate trading or sales through brokerage relationships within the next 12 months.
In the end, I think Masterworks is extremely interesting. The minimum investment is quite low to get started using their platform, so it could be an interesting way to diversify an investment portfolio with art as the asset.
Do you have a diversified portfolio? Why or why not?
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To talk about art, I have several brand new still in the plastic, never read, and virtually untouched, no pages torn comic books from 1990, 1991, and so on that are brand spanking new. I’m considering selling them for above dollar amount. I’d like to target customers online in the U.A.E, but have no know how to do that. Those billionaires over there wouldn’t mind paying me whatever I ask for the comic book price.
Great piece, Michelle.
And thanks Masterworks for bringing our attention to this.
Can someone living outside the U.S. invest in this?
What channel can used and how he get paid his dividend since he doesn’t based U.S. Bank account. I know PayPal is not a good option for receiving payment in this case.
If I’m covered in these questions, I will give it a deeper thought.
Thanks.
Emenike
Wow, I didn’t realise crowdfunding had permeated into the asset class of fine art. I was even more surprised to learn that it had outperformed the stock market so significantly.
It’s great that investment opportunities like this are becoming accessible to everyday people in the digital age. Given the returns, I’m thinking of investing a small amount in this…
This is so interesting! I have never thought about investing in art. I am intrigued by the idea. 10% increase is much more than most of my current investments. I will look into this more and hope to give it a try! Thank you for sharing this tip!
It’s really very informative and helpful. Thank you for sharing such an amazing information. Besides this every thing is clear and best in this article. Keep it up.
What an interesting idea for diversifying one’s portfolio. I will definitely look more into this and will test it out with the minimum amount. I’ll be back to update on how that works out 🙂