By Dora Grossman-Weir
The Best Alternative Investment Opportunity in 2024
The most popular financial advice given to people both young and old is probably “start investing early,” and “diversify your portfolio.” But whether you’re a seasoned investor or just beginning to dip your toe, anything more than a regular, incremental deposit into an ETF can feel daunting and risky.
What causes this anxiety and insecurity around investing? To start, it can be hard to find information on what you’re actually investing in. The market feels increasingly turbulent, and alternative investments, such as commodities or real estate, often require too much capital at the outset to make a meaningful investment. It’s almost impossible to find an investment that feels safe, solid, and provides consistent returns.
One of the buzziest alternative investments that investors can leverage to diversify portfolios is Contemporary fine art. Artprice, the leading source of information on the present day art market, found that blue-chip art prices have outpaced the S&P by 131% over the last 26 years. And since there’s a low correlation between the success of the Stock Market and the appreciation of fine art over time, these investments can also protect that portion of your portfolio from turbulence.
In spite of the upside, the problem remains that a strong investment in fine art requires not only a massive amount of initial capital to make an investment, but also a remarkable knowledge of trends and value in the world of Contemporary fine art.
One platform that is making alternative investments in fine art more accessible is Masterworks. The concept is simple: you can invest in a smaller share of a physical piece of fine art that is owned by Masterworks itself. The pieces in question, from Banksy, Basquiat, Picasso and more, have been selected by experts in the field – Masterworks handles the research and Art History knowledge, and investors can just reap the benefits.
Masterworks is also gaining traction for the transparency and accessibility of their platform. Their website and mobile app are both incredibly user-friendly and easy to navigate, featuring the most comprehensive price database to understand the appreciation rates. Masterworks also provides artist information, so users can be familiar and excited about the pieces they have a stake in.
This positive user experience wouldn’t be anything to write home about, though, if it wasn’t for Masterworks’ proven history of positive returns. It’s easy to be pretty floored by their success rates. Masterworks 22 successful exits have all been positive, driving annualized returns of up to 77%.
If you’re looking for both safety and portfolio diversity, a combination that is famously hard to find, fine art may well be your strongest option. And if you want to enter that world with a low buy-in, we think Masterworks is the best platform on which to do it. Plus – it’s pretty cool to be able to say you own a Picasso… even if it’s just .05% of one.
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by Dora Grossman-Weir