Best platforms for investing in art: exploring options for this alternative asset class


Physical artwork can provide lucrative investment opportunities, but unfortunately for the average investor, the minimum investment is too much. Realistically, not many people have millions of dollars that they can dedicate to a long-term investment.

Precisely for this reason, many interested investors may turn to art investment funds instead, which offer a way to invest in art without having to purchase — and take care of — a physical piece of art. However, non-accredited investors may run into issues if the technical funds they are interested in require an investment approval.

Fortunately, with the passage of time, more and more platforms are opening their doors to non-accredited investors, allowing the average individual investor to invest in the art market.

If you’ve been fascinated by art galleries and are now considering these types of alternative investments (but aren’t quite sure where to start), keep reading to learn about the best platforms for investing in art!

Why invest in art?

For better or worse, most works of art have little or no market value. Usually, the type of artwork that you will find on an alternative investment platform is premium art, or art that has a great monetary value.

Investing in works of art can provide great returns for impatient investors, as pieces of art often appreciate greatly in value over time. Even better, these alternative investments are independent of the stock market, which means that your investment(s) should be relatively stable during times of market volatility.

However, there is generally—though not always—a major downside to investing in art: the lack of a secondary market. Will this be a problem for you? Well, it depends How do You invest.

Ownership versus investment

Art is notoriously lacking in liquidity in general. Being “liquid” simply means that you can sell your assets at any time, either at a loss or at a profit. However, even selling an individual piece of art can take some time.

Of course, owning physical artwork makes selling art a lot easier. Even if you need to sell at a loss, chances are you can liquidate the artwork in a reasonable time frame. While this approach may work for an individual, this is not what the tech investment platform wants. They are in it to make money.

As such, unless your choice of artwork has a secondary market, your investments are unlikely to have any liquidity. Many platforms do not allow you to sell fractional shares, which means that you will need to keep investing until the end.

Unlike stocks, you won’t get an annual return either. You will reap most of your rewards when the individual lot is finally sold. In the meantime, you may be responsible for paying an annual administration fee (and any other applicable fees).

However, the upside is that you will not be responsible for storing, protecting, handling, or selling the actual artwork. This makes the administrative fee seem reasonable because it’s so easy to accidentally damage artwork (and one mistake can cost hundreds of thousands of dollars!).

With that quick ‘Own vs. Investing’ comparison out of the way, let’s get down to the search for the best platforms for investing in art!

Yeld Street

Yieldstreet art investments are only available to accredited potential investors. Assuming you’re accredited, Yieldstreet allows art investors to invest in one of six fine art-focused funds. Different funds focus on different parts of the art market, such as established or up-and-coming artists.

With Yieldstreet, it is important to understand that you are not investing in an individual piece of art. Instead, you are investing in several artworks at the same time. For accredited investors who have more than $10,000 and want immediate diversification, Yieldstreet can be a promising option.
Learn more about Yieldstreet

masterworks

masterworks

If you are looking for a dedicated platform – accessible to the everyday investor – that gives you instant access to excellent technical investment opportunities, then MasterWorks is the platform for you.

Focusing primarily on the work of contemporary artists, MasterWorks enables the retail investor to purchase partial shares of premium art as part of their long-term investment strategy.

Exact offers vary by piece, but the process works the same across the entire site: Investors buy shares of the artwork and make a profit when the piece is sold. However, MasterWorks also has its own secondary market, which means you may be able to sell shares you no longer want to hold.
Learn more about MasterWorks

General

General

Public is another platform that gives investors access to alternative assets (in this case, artifacts). Although you need to have legal residency in the United States, accreditation is not required to invest in a piece of public art.

The platform offers many different types of alternative investments, so its technical offering isn’t quite as diverse as the ones you’ll find on Masterworks. However, it works in a similar way, allowing individuals to buy partial shares of a piece of art.

Public.com itself has no minimum investment requirements, which makes it a great option for those with little cash.
Learn more about the audience

summary

As of now, there aren’t a lot of options for individuals hoping to start investing in art without actually owning the pieces themselves. While any of the above platforms could work for this purpose, our recommendation is Masterworks.

Masterworks offers huge potential returns and opportunities to invest in excellent artwork, and is an easy way for anyone to start investing in art, certified or not.

Click here to get started today!



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