The art market offers a unique avenue for investors seeking not only capital growth but also the pleasure of owning culturally significant pieces. In this article, we delve into why art investing worth your time and why it holds a special place in the heart of investors.
A Growing Behemoth
The art market is larger and more diverse than ever before. With the global art market valued at around $70 billion in 2022 and showing consistent growth over the years, it’s clear that investing in art is becoming more than just a niche pursuit of the super wealthy. Some of the factors that are boosting the growth possibilities of this asset class, include:
- The emergence of platforms like Masterworks, Pubic, and Yieldstreet that offer fractional shares in artworks.
- Online share trading platforms like Robinhood are increasing the financial literacy and confidence of everyday investors, who eventual branch out to alternative assets like cryptocurrency and art.
- Young investors in Asia with an appetite for art and art investing.
Low Correlation to Other Assets
One of the key reasons to consider art as an investment is its low correlation to traditional assets like stocks and bonds. While financial markets may experience volatility, the art market often moves independently. This low correlation makes art investing a diversification strategy to hedge overall portfolio risk.
Dedicating something like 10% of your net worth to alternative assets like art is a prudent risk strategy.
Investing in art goes beyond monetary gains. Owning art provides a sense of personal satisfaction and collectors can forge a deep connection with the works they own. Additionally, displaying art in your living or working space can create an environment that stimulates creativity, conversation, and inspiration.
Strong During Economic Uncertainty
Art has shown remarkable resilience during times of runaway inflation and other economic hiccups (like which the globe is currently experiencing). Throughout history, even during periods of recession or financial crises, a lot of art has held its value.
Blue chip artworks, those created by renowned artists with established reputations, often fare best during economic downturns due to their demand butting up against their extremely limited supply. This is why we at Easel Investing have a preference for this type of art.
Navigating the Art Market
While investing in art offers unique advantages, it’s essential to approach the art market carefully. Art valuation, provenance research, and understanding market trends are crucial for making informed investment decisions. Collaborating with art advisors can help ensure your investments align with your financial goals.
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We welcome you to Contact Us with any questions you have about investing in art. Let us know your budget, the kinds of art that interest you, and we can work out a plan to get you started with art collecting the right way.