Invest well, and watch your wealth grow. That’s the mantra most experts advise people to follow. A proper investment strategy is a sure-shot way to increase your money’s value, avoid inflation’s ill effects, and enjoy future returns.
Some popular investment options are bonds, mutual funds, exchange-traded funds, savings accounts, certificates of deposit, real estate investing, government bonds, and annuities.
While those are good options, have you ever considered investing in fine art? As this website and others like it will tell you, art investment works as a hedge against inflation and provides significant financial benefits because of its value appreciation with time.
The value of art is recognized all over the world, with statistics proving that sufficiently. According to statistics, the global art market’s value stood at 65.1 billion USD, increasing by roughly 29% from 2021. The USA has the highest share in this market at 44%.
But what are some reasons to invest in art, including the two mentioned above? Continue reading to find out.
Diversify your investment options
Most financial experts advise diversifying your investment assets, reducing the risk of losses in a single holding. In addition, it ensures the preservation of capital and increases risk-adjusted returns (a method that calculates the amount of risk involved in getting a return).
Investing in art is one of the best ways of diversifying your investment portfolio because it promises stable returns and is a tangible asset.
It is a tangible asset
As mentioned above, an art piece is a tangible asset since it has a monetary value and occupies a physical space. Since it is something you can see, touch, and admire, it gives you a feeling of personal satisfaction. Those are the same qualities that attract artworks to other buyers and make selling them more straightforward.
Enhances your reputation
Besides the monetary gains, investing in artworks rewards you by enhancing your reputation. You can decide to loan the art to museums or galleries and other showcasing opportunities. By doing that, you promote the artists, thereby increasing their overall value.
If you have an exclusive or extensive collection of a particular artist, making you an expert in their work, art galleries might invite you to showcase your collection. The more you attend such events, the higher it benefits you personally.
Impressive long-term returns
By investing in art, you can enjoy long-term returns, which sometimes match those fixed income offers. For example, studies show that modern art has enjoyed an annual return of 7.5% since 1985, with the art market having a return rate of 5.3%.
It is a stable asset
If you are looking for an asset unaffected by the unpredictability of markets, look no further than artwork. No other investment, except perhaps gold, comes close to the art market regarding the potential for future profits.
The resilience of the art market
The pandemic tested the resilience of the art market when, after an initial drop in prices, the art market underwent a restructuring, expanding into a new market fuelled by online buyers and sellers.
According to some experts, its share in the e-commerce industry rivals that of retail, which is impressive. The digital revolution in the art market has also given way to NFT art, which refers to digital tokens representing authentic art pieces.
Best way to invest in art
The best way to invest in art is through platforms that provide you the opportunity of not just purchasing popular pieces but also buying and selling shares representing an investment in famous paintings. Platforms like this website have a research team that selects artworks with a strong presence in the market, thus guaranteeing higher returns.
Investing in art is an excellent investment option because of its several benefits, including high returns, stability, resilience against market fluctuations, and personal satisfaction. Even if you haven’t explored this option before, you must try it now.