What is Masterworks.io / Investing in Art?
You've likely seen the headlines of some nice art selling at auction for $100 million or more? Or what about the story of some guy finding a painting in a garage sale and it was worth millions? You may be thinking to yourself - artwork commands enormous prices. Maybe there's an investment opportunity here? Well, in fact there is, and individuals have been investing in art for 100s of years.
However, in the last few decades, innovations in the investment area have allowed individuals to purchase fine art - even ones worth millions of dollars. Together with Masterworks.io, you can buy a fractional ownership of blue-chip fine art.
Masterworks is an investment firm that helps you buy shares of fine art. The company offers a simple investment product that's simple to understand and facilitates investing in the kinds of artwork previously accessible only to very affluent investors. Based on The Wall Street Journal, in 2018, art returned a mean of 10.6% return versus a 4.38% loss in the S&P 500.
In a good year the S&P 500 grows an average 7-10%. Masterworks intends to outperform the S&P 500, but as with any investment class, there are winners and losers. For the longest time, many have been intimidated by the idea of investing in art. Masterworks has created a platform, where they do the research, due diligence and allow you to get in on the action of investing in art.
“Artwork made by some of the world's most significant artists tends to appreciate at the highest rates, but very few people can access them due to the price point. Masterworks aims to make it possible for anyone to invest in this asset class by offering the opportunity to invest in artworks at an affordable entry point,” said CEO Scott Lynn, in a press release.
"Blue-chip Art Paintings are timeless, so investing in them comes with a great deal of security. In that way, it's comparable to investing in real estate".
How does it work?
By buying art and selling fractions of it to investors, Masterworks.io can sell art at a much lower price. A lower price does not mean lesser worth. The art still retains its worth. The Masterworks.io's platform employs blockchain technologies to sell fractional shares of art. You may wonder why an art company requires blockchain technology.
Let's look at a complete transaction to understand this. Masterworks.io looks at how particular art pieces have appreciated in value over time. It wants to buy artwork with the best chance of continuing to appreciate. That is how smaller collectors will make a return.
Once a piece is chosen, Masterworks.io buys it then registers the artwork with the Securities and Exchange Commission (SEC). This securitizes the art. Following the artwork is approved by the SEC, Masterworks.io can set it for sale on their own platform. The first part will be Warhol's 1 Coloured Marilyn with 99,825 shares available.
This is where the blockchain technology comes in. Masterworks.io platform is based on the Ethereum blockchain. Clients can hunt art pieces in their platform and choose one to invest in with as little as $20, even though you need a $1,000 deposit to begin. Another type of investing in Art on the Ethereum blockchain is NFT Art. Which has had quite the craze lately when it comes to digital art valuation.
The platform allows investors to monitor the operation of their art over time. As it appreciates, the investor can choose to sell their shares for a gain. Masterworks.io will gradually let clients use Ethereum tokens to complete trades on the stage.
Is Art a good Investment?
Art is a commodity, simply put. Art's value is speculative, just like any other assets such as gold, stocks and crypto. I always like to say, nothing is guaranteed when making any sort of investment. But taking into consideration past performance data, the market growth and the fact Art is something that will always be heavily involved in our lives.
Having some of your eggs in the Art basket is more than likely to benefit your portfolio in the future. Like with shares, bonds, and other investments, a diversified portfolio can help you manage risk. While investing in Art may be an enjoyable addition to your portfolio, it should not constitute a huge part.
In conclusion, Masterworks does not have specific minimum investment amounts. Minimums vary based upon the particular investment offerings available at the time of investment. While there are certainly some opportunities for improvement, it gives an opportunity to diversify into alternative investments without a seven-figure net value.
That said, Masterworks is best suited for people who can afford to eliminate all or a portion of their investment. Art buyers could be unpredictable, and there's no guarantee you will make money even with a"blue-chip" artist. If you are searching for alternative investments to escape the stock exchange along with other conventional assets. Investing in art with Masterworks could be an entertaining and profitable idea.
If you're looking to Buy investable affordable art yourself, check out:
5 AFFORDABLE ARTISTS YOU SHOULD INVEST IN
This is NOT Investing or Financial advice, we're sharing our opinions respectfully from a speculative point of view.