Final Thoughts. Masterworks.io is an interesting platform. The ability to invest in fine art is attractive, and may be interesting to some investors looking to diversify into alternative investments. However, the fees are very high compared to other investment alternatives, and there is no guarantee on appreciation.
One major perk of art as an asset is that its value doesn't rise or decline with the stock market. Even if your stocks aren't performing well, your art investment may be doing great—good news for the savvy investor who wants to diversify a portfolio and minimize risk.
Masterworks has created a way for the average person to invest in high-end paintings from well-known artists such as Andy Warhol. If you are interested in diversifying your portfolio with art, then Masterworks work could be a good option.
Like the term blue-chip stocks—generally large companies with good reputations that are considered solid investments, for example Johnson & Johnson (JNJ)—blue-chip art is made by master artists and is expected to retain or increase in value no matter what the stock market is doing.
6 Simple Steps to Start Investing in Art
by Masha Golovina, Director of Market Analysis
Similarly, blue chip artworks are those which have been created by the most important and widely recognized artists, whose position in the auction market has been solidified by exceptional sales volumes over the course of several years.
Value appreciation
When buying original art straight from a gallery or an artist there is always a good chance that the piece will grow in value over time because of its uniqueness and the successful development of the artist who created it.
Pay yourself a reasonable hourly wage, add the cost of materials and make that your asking price. For example, if materials cost $50, you take 20 hours to make the art, and you pay yourself $20 an hour to make it, then you price the art at $450 ($20 X 20 hours + $50 cost of materials).
The reason why some paintings are so expensive is that the artists who painted them are no longer alive anymore. The value of art increases significantly after the artist is dead. Because it makes that piece exclusive and more important. Most of the famous art by eminent artists are preserved in museums.
Potential buyers make an offer that must be approved by a majority shareholder vote. When the art sells, the proceeds are divided among the pool of investors. Masterworks takes 20% of the profits as a fee. If you want to get out early, you can sell on Masterworks secondary market.
How Does Masterworks Work? By buying an art piece and selling portions of it to different investors, Masterworks can fund its purchase. It can then be sold off later for a profit. The platform uses blockchain to sell different shares in the same artwork to various investors.
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