Dec 7, 2022
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The current state of the economy has dealt some heavy hits to the everyday investor.
As of January, the inflation rate in the U.S. sits at 6.4%, led by rising costs of gas, housing, food and other goods. In response, the stock market has plunged more than 16% year-to-date, but that doesn’t mean you should stop investing — you just need to branch out.
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This is where alternative investments come in. Alternative investments — assets other than stocks — can help hedge against inflation, protect your wealth from downside risk and potentially enhance portfolio returns.
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Thanks to one disruptive start-up, a top-tier alternative investment has finally been made accessible to everyday investors — fine art.
Consistent historical performance of art
You probably think of art as just some canvas that makes your living room look nicer, but art has quietly outperformed other asset classes for years.
Art is part of a $1.7 trillion asset class according to Deloitte, which is roughly half the size of venture and private equity. Contemporary art has outperformed the S&P 500 by 131% for the past 26 years, and it has a near zero correlation to stocks according to Citi.
Having a low correlation to stocks makes art a useful hedge against market volatility. Masterworks, a platform with a $1 billion unicorn valuation, is revolutionizing art investing and bringing this asset class to your portfolio for the first time.
More: 4 fine art trends to keep an eye on
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Becoming an art investor
Masterworks makes it possible for every savvy investor to access an asset that has previously been limited to the ultra-wealthy. Instead of buying a single painting for millions of dollars, you can now invest in shares of individual works.
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With this revolutionary investment platform, all you have to do is select which shares you want to buy and Masterworks will handle the rest.
They do all the work for you, finding, purchasing and storing the artwork, while you get the rewards.
Masterworks holds the piece until it appreciates in value. When they sell it, you get a prorated portion of the profit. It may take some time — Masterworks will sell the piece in 3-10 years — but they have a track record of 9-39% net annualized returns on sold paintings. Plus, if you don’t feel like waiting for that windfall, you have the option to sell your shares on their secondary market.
Get started investing in art
Still unsure? Take a cue from Forbes: “If you’re looking to diversify your portfolio without spending a fortune, Masterworks offers a compelling option.”
It only takes seconds to apply for Masterworks — they make it simple to invest in art and potentially rake in those colorful returns.
Skip the waitlist with this exclusive offer for Moneywise readers.
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Diana Bird is an Associate Editor for Moneywise. She has a bachelor’s degree from the University of Toronto in English Literature and Classical Civilizations as well as a Certification in Publishing from Toronto Metropolitan University. Prior to joining Moneywise, Diana worked for a non-profit organization that delivered training to financial supervisors in emerging and developing economies.
Investing • Aug 01
