Why Are Some Billionaires Buying This 277-Year Old Asset Class?

(Image source: Scott Beale on Flickr) *Sotheby’s Auction House established in 1744

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NFT art has become popular recently, but there is an older asset class rising in popularity too.

Recently, NFT artwork has outpaced traditional investments such as stocks and bonds. Case in point, Pak’s The Merge sold for $91.8 million. Beeple’s The First 5000 Days fetched $69 million. And CryptoPunk #7523 was purchased for an incredible $11.7 million.

But while most investors are focused on NFT art, there's another asset class some of the ultra-wealthy are collecting: Physical art

Recently, the Rothschilds sold this asset for over $197 million to the Dutch government. Oprah Winfrey sold this same asset for $150 million (grossing $62 million). And Jeff Bezos bought $70 million worth of art.

And there are a few good reasons why 73% of ultra-high net worth Americans, surveyed by UBS, consider buying art to diversify their portfolio:

Blue-chip art prices outpaced S&P 500 returns by 164% (1995-2021).
Blue-chip art appreciates 23.2% on average when inflation is at least 3%.
Art and collectibles is an estimated $1.7 trillion asset class that’s expected to grow 58% in just 5 years, according to Deloitte.
The WSJ recently called art “among the hottest markets on earth.”
Art has among the lowest correlation to public equities of any major asset class, according to Citi (from 1995 to 2020).

Most people think you need to have millions in the bank to invest in fine art from famous artists like Picasso, Basquiat, and Condo. And while that may have previously been the case, it's no longer true.

With Masterworks (the biggest investment platform dedicated to blue-chip art), investors can buy shares representing an investment in artworks. That gives investors the opportunity to invest in this overlooked asset that the likes of Brad Pitt, Beyoncé, and Leonardo DiCaprio have also invested in... for a fraction of the cost of purchasing an entire art piece.

What is the $1 Billion Masterworks.io Platform?

Masterworks.io is a $1 billion art investment startup that allows everyday investors to invest in blue-chip (contemporary) art for a fraction of the cost of buying an entire artwork.

That’s because, in 2012, the JOBS Act allowed alternative assets including famous artwork to be purchased by non-accredited investors as individual shares representing an investment in artworks, among other alternative assets.

That allows Masterworks.io to give investors the opportunity to invest in art from famous artists like Banksy, Basquiat, and Warhol for as little as $20…

And the platform allows everyday investors access to the same types of paintings collected by the ultra-wealthy.

With 312,234 users and counting, the Masterworks.io platform has become very popular. It’s a way to invest in famous artworks without spending millions of dollars outright.

Why is this alternative asset so popular right now?

According to Citi, in the first 7 months of 2020, art’s outpaced certain other asset classes such as equities, cash, real estate, commodities, and even private equity during the pandemic.

That’s because art generally has a low average correlation to the stock market, the BBC explained. So blue-chip (contemporary) art prices don’t necessarily follow the direction of equity market moves.

And during periods of high inflation of 3.0% or higher, blue-chip (contemporary) art has outpaced other asset classes such as REITs, equities in the S&P 500, and gold.

So for investors who wish to diversify into this alternative asset, there’s Masterworks.io.

The only downside is… once certain goals are reached for each artwork, they close the offering to new investors. For example, recently, a Banksy painting called “Exit Through the Gift Shop” sold out in less than three hours on the Masterworks.io platform.

How to buy the “billionaire asset” with just a few clicks?

Investors only need to follow three steps to get started:

1) Go to the Masterworks’ signup page.

2) Enter contact information and answer some questions.

3) An art investment representative will contact you.

Or call 203-518-5172 (9 am - 6 pm EST Monday through Friday) to learn more about the asset class, go over financial goals, risk tolerance, and other considerations with an art investment representative.

See important disclosures at masterworks.io/disclaimer