Is Art a Good Investment?

November 8, 2021

If you have a serious passion for art, you might think that it is something worth investing in. Not only can it brighten up a dull room, but it can also make you some money.

The majority of people who invest in art start out as collectors, however, this is not a requirement to begin investing. But in order to safely invest in the art, one essential thing you will need is knowledge of the scene.

It will help you to find pieces that are likely to grow in value and give you a better understanding on how the art market operates. If this is not you, then you may want to find somebody who can help.

Generally, it is all about finding pieces that have long-term value, and if you already are a fully fledged art fan, then you will be ahead of the game compared to those who have never stepped foot inside an art gallery.

Of course, the problem with any type of investing is that it has the potential to be risky. Before venturing into the art investment world, it’s important to do your research.

Here Is How Art Investments Work

If you are looking to invest in art, the key thing you need to do is be patient. Why? Any kind of real profit you may make from investing in art will not happen overnight. Art tends to increase in value depending mainly on the artist’s reputation.

If the artist has a successful career with a vibrant reputation, their artwork will shoot up in cash value. This is what you are looking for, but it is not something that will likely happen in the first month you invest.

On the other hand, a new artist’s reputation may not last, devaluing their artwork and in the process earning you nothing.

At its core, art investment is a long game. Experts recommend it could take a time window of around ten years or more to find value in a certain piece, so if you are after a get rich quick scheme, this isn’t it.

The good news is that art will not be influenced by the stock market. If you have a diverse portfolio of artistic investments, they will likely be safe from standard stock market fluctuation.

How To Begin Investing In Art

First things first, immerse yourself into the art world. It isn’t just about appreciating art, it is about visiting galleries and seeing pieces firsthand. Speak to the people who work in galleries and learn about what they look for in an art piece. It may also help to find which artists people are enjoying at the current moment,

Check out any art fairs and galleries that may be featuring interesting artists. Are there any particular artists people are talking about? Take note. Also, it can’t hurt to browse at art auctions to get a feel for prices and value.

As with a lot of things, you will have to spend money to make money. When it comes to picking the right art piece, spend as much as you are willing to risk – you never know how it will eventually turn out. Other money factors include storage and any maintenance costs, should your chosen pieces require it.

If you do decide to buy art to store, think about how you will care for it. It needs to stay in its original condition, and may also require insurance and a certification of authenticity. These should all be factored in where profits are concerned.

Once you have found a piece of art you are interested in, take time to find out more about the artist and how much the artwork costs. You can either buy it yourself, or buy shares via an online marketplace – the latter being cheaper.

Even so, make sure the art you are investing in is legitimate, of quality, and is from a reputable art dealer or gallery.

Need An Option Without Storing Art?

There are ways to invest in art without ever touching it, such as with Masterworks. They do a lot of the hard work for you so it is an easier option for the novice, or those who want less of the inevitable hassle.

Along with other investors, you can purchase shares in very high-value artworks that have already been authenticated by experts. The company buys the artwork and sells shares of it to the investor.

There are other companies that do this too, so it is worth looking around to find one that suits your needs, art preferences, and budget.

What You’ll Want To Look For When Buying Art

There are so many artists out there that it can easily become daunting. Plus, how do you know who is good and who is probably not worth your time and money?

Instead of using the internet for answers, your best bet will be speaking to an expert who can determine whether the artwork you have chosen is worth it.

Speaking to a professional will also ensure that you’re buying art for a fair price, so hopefully you will get your money’s worth and turn a good profit.

Before you can do that though, you will need to find some artwork that interests you. An original or a one-off will be the most expensive artwork you may come across. Because of this, it also means these will have the biggest profit. As much as these are worth investing in, you will need a large investment to start with, though it will all pay off in the end if the artist does not devalue.

Prints are much more affordable than a one-off, but will not turn a profit the same way. The key to finding a good investment print is to look for a limited run which will make it much rarer.

A limited edition will always be worth more than a mass reproduction print.

Speaking of mass reproductions, these may not be worth investing in. While they are affordable, they often do not end up turning much of a profit.

Final Thoughts – Is It Worth It?

Any form of investment carries risk, especially when it involves using your own hard earned cash. Art can be a great way to invest, but it shouldn’t be the only thing in your portfolio because of the time it can take to reap rewards.

If you are ready to take the leap into art investment, have a healthy budget in mind without putting yourself into debt, and make sure that you’re alright with playing the waiting game. Not only is it a good way to diversify your own investment portfolio, it could also open up a whole new world of art possibilities – especially if you already had a love for art but wanted to do more with the passion you have.

It can be risky, but what investment isn’t?

Masterworks is a fintech company democratizing the art market. Our investors are able to fractionally invest in $1mn+ works of art by some of the world's most famous and sought-after artists.