Millennials: “Art Is an Investment”
There has been extensive media coverage recently on millennials, their personal brands, and how they are choosing to spend their time and money. While social media and technology have dramatically impacted millennials’ lifestyles, these developments have also helped contribute to millennials becoming increasingly involved in the art market, specifically as investors. In a new Business Insider article titled, “Forget real estate — ‘art flipping’ is the latest way rich millennials are building wealth, and it’s an investment baby boomers largely ignored,” millennials are highlighted as active collectors, who do not shy away from simultaneously treating art as an investment. Despite the tendencies of the previous generation of Baby Boomers to invest in more traditional assets, the younger generation generally views art as a bona fide alternative asset and many are considering strategically allocating a portion of their growing wealth to art.
The article continues:
“[Millennials are] more likely than other generations to contemplate a work’s value and the overall market rather than [solely] the aesthetics of the piece before deciding to buy.”
While it seems that young art collectors do still consider the beauty of an artwork and the connection to self, they are also drawn to art for the potential financial gains it can bestow on the buyers. Those born between 1981 and 1996 are estimated to account for roughly a quarter of all active art collectors. Whereas previous generations of art collectors would most often take pride in holding the works they purchase for decades, today’s new collectors are making a name for themselves in “flipping art,” where they buy a work and sell it within a relatively short timespan to realize a quick profit.
The idea that younger collectors today are using art to build wealth has become a hot topic for research as well. A recently published piece by Art Market Guru, titled “How Millennials Are Changing The Art World,” noted that young art collectors are extremely cognizant of the dynamics of art as an advanced wealth-building strategy. Not only are new collectors acquiring art for investment purposes, but they are using new (by art world standards) technology platforms to source and sell art in the $100,000 to $1M price range online. These new venues are providing additional transparency and liquidity in the art world, and have empowered younger, more strategic investors.
In some cases, millennials may inherit art collections from their family, but millennials are increasingly likely to purchase art as a means of investing. The younger generation strongly feels that art is a financial asset that can be leveraged to build wealth. This view, coupled with new technology platforms, has increased exposure and involvement for young art collectors and investors. Based on a handful of reports published by trusted news outlets, a large percentage of millennials indicate they plan to allocate some capital to this increasingly compelling asset class and strongly feel that art is an investment.
 Art Market Guru: How Millennials Are Changing The Art World; August 3rd, 2018: “Young art collectors comprise around a quarter of all collectors: a 2018 article from insurance company AXA estimated that 15-25% of collectors are young, while the 2018 S. Trust Insights on Wealth and Worth study found that 27% of its respondents were millennials.”
 Bloomberg; The New York Times; Bank of America; Art Market Guru. All sources above.