Art Prices Have Beat the S&P 500, Nasdaq Over the Past 26 Years: How You Can Get Involved

Investing in S&P 500 and Nasdaq companies has long been a common strategy. While there's nothing wrong with continuing down this path, alternative investments — such as fine art — should also be on your radar.

Get this: Art prices have outpaced the S&P 500 by 133% over the last 26 years. The same holds true of the tech-heavy Nasdaq, coming out on top by 77% over the same period.

Knowledge of fine art can help you achieve stellar returns, but it's not a requirement. Instead, you can invest through online platforms such as Masterworks.

Read Next:

• How One Artist Earned $738K In 32 Minutes
• Johnny Depp’s Lesser-Known Talent Rakes in $3.6 Million in Just a Few Hours And It Could Make You Rich Too

What is Masterworks?

In its own words, "Masterworks is the only platform that lets you invest in multi-million dollar works of art by artists like Basquiat, Picasso, Banksy, and more."

Rather than purchase physical art, the Masterworks' platform allows anyone to buy and trade shares in multi-million dollar, blue-chip artworks. This allows you to build a diversified portfolio of iconic works of art, all with the knowledgeable backing and experience of an industry-leading research and acquisition team.

How the process works

Here's how the Masterworks platform works for investors:

1. Artist Selection: Masterworks’ research team utilizes proprietary data to identify artists whose markets are trending upward.
2. Art Acquisition: Identifying potential and fair pricing, the Masterworks acquisition team purchases the selected artwork.
3. Artwork Securitization: Masterworks files an offering circular with the Securities and Exchange Commission, thereby allowing public investment.
4. Duration of Art Holding: Masterworks retains the artwork for a period of 3 to 10 years. After selling the painting, the company disburses the proceeds on a pro-rata basis, subtracting their fees.
5. Direct Sales by Private Sales Team: Masterworks’ specialized sales team, working from a dedicated gallery space, liaises with top-tier art collectors to directly sell the artwork.
6. Share Trading: Investors have the option to try and sell their shares on Masterworks’ trading market. However, Masterworks cannot ensure sufficient market liquidity, reliable investment monetization, or accurate valuation of shares.

What else do you need to know?

Those are the basics, but here are some other details showing why the Masterworks platform has more than 755,000 members. 

• Less than 3% of artwork passes its diligence process
• There's a live price database that shares individual artist and artwork metrics (i.e. purchase price, sale price, gross appreciation)
• Contemporary art prices have historically demonstrated a low correlation with other asset classes

Historically, Masterworks has outperformed the stock market, gold, real estate, and many other asset classes. So, If you're ready to diversify your portfolio by investing in artwork, Masterworks is the simplest and most efficient way of doing so.