Amid the gravitational pull of gold, fine art flies under the radar of most traders, who usually see it as a ‘subjective' rather than a ‘safe' asset.
Analysts at trading platform Masterworks claim fine art outperforms gold during peak inflation, citing data from 1973 to 1981 when inflation in the US was running at around 9% each year.
Gold averaged an annualized growth of 31.1% during that period, while the art market had an average calendar-year appreciation of 33.2%.
More recently, from 2000 to 2018, the “Artprice 100” (the leading index for top 100 artists in the market) delivered annual growth of 8.9%, while the S&P 500 averaged 3.4%.
Great returns – if you can get them. For decades, the art market has remained out of reach for most retail investors.
The good news for those on Main Street is Masterworks is breaking down the entry barriers to this exclusive market and democratizing access to its outsized returns.
How Masterworks Work
Masterworks is an art investment fund that buys artworks on behalf of a group of investors.
Yet as a digital platform, Masterworks can further subdivide collective ownership into fractions of a percentage. This means regular buyers can now buy a portion of the artwork like stocks in a company, thereby dramatically reducing entry barriers.