If you have arrived on this page, then you must be thinking about diversify your investment portfolio into art. But, perhaps you are unsure if investing with Masterworks is right for you, or whether you should stick to investing in smaller and more affordable artworks.
While you don’t have to choose one over the other necessarily, this guide should help you decide in what ways you might like to invest in art. To decide whether Masterworks is right for your investment portfolio, it would be helpful to answer the following three questions about yourself:
- What kind of artworks are you interested in?
- What kind of artists are you interested in?
- Do you want to live with the art you invest in?
What kind of artworks are you interested in?
If you interested in investing in the most expensive Blue Chip painting then Masterworks might be your best option to get into the market. Unless you have the wealth to purchase these kinds of artworks worth millions of dollars yourself, you will appreciate the option to purchase fractional shares in these artworks via Masterworks (starting from about US$20 per share).
Additionally, the artworks available on Masterworks are mostly paintings, so if you have a preference for sculpture or any other type of medium (particular prints, which tend to be far more affordable for beginner collectors), you might be better off buying these kind of artworks for your own personal at-home collection
What kind artists are you interested in?
If you are interested in household names like Banksy, Kaws, Yayoi Kusama, Damien Hirst, etc, then Masterworks has you covered. Masterworks only invest in Blue Chip artists that already have a significant following and positive track record in the art market. This means that their portfolio doesn’t have artworks from emerging artists (that can have more upside potential, but also more risk). So, if you are want a safer investment in art, then Masterworks fulfills this criteria.
If you are interested in investing in emerging artists (before they really make it big), then it would be best for you to invest outside of Masterworks, and explore purchasing original or print works by these smaller names. But you should be confident that your investments are going into artists that are on the right track to enter Blue Chip status in the coming years (hint: its not about what artists you like, but what art collectors as a whole like).
Do you want to live with the art you invest in?
If you would rather avoid the responsibility of ensuring that your artworks stay in good condition before you eventually sell, than the hands-off experience with Masterworks is the better option. Masterworks handles all maintenance and storage costs (as part of their yearly fee) which become more important the more expensive the artworks.
If living with your collection and being able to appreciate the works on your walls everyday is important to you then Masterworks is not going to be able to satisfy this need. I believe Masterworks did tout the idea of holding exhibitions only public for members, but I don’t think many (if any) of these events have come to fruition.
Final thoughts
When you were answering these these questions, you may have found that you are interested in the benefits of both Masterworks and curating your own collection (i.e., you want to invest in both Blue Chip artists for the sense of safety, and Emerging artists to capture higher returns. Investing in art via a personal collection as well as via Masterworks is a totally valid investment strategy, and from a diversification perspective, perhaps ideal.
If you have any further questions about investing in art funds, like that offered by Masterworks or Yieldstreet, please reach out to mark@easelinvesting.com, and we would be happy to set you on the right path. Additionally, you can learn how to skip the Masterworks waiting list here.
