Art as an investment – ​​Blue Chip Art outperforms stocks, gold, real estate and inflation

An old piece of advice among investors in times of high inflation is: “invest in tangible assets” . Works of art also fall into this category, as they are not only an important part of our culture and identity, but also an increasingly worthwhile investment and store of value for many people in uncertain times – especially blue-chip art .

In this way, not only does our soul benefit from wonderful art, but our wallet does too.

Long neglected, this asset class has recently experienced a surge in popularity. This is due not only to the excellent returns of select art categories, but also to technological innovations and art trading companies focused on NFTs , tokenization , and fractional art investments (art shares) , which now also allows smaller investors access to lucrative art investments.

Art as an investment – ​​Investing successfully in art

Investing in art is a unique combination of a passion for art and a desire for financial returns. Furthermore, the high prestige factor art investments from other forms of investment. In addition, the emotional value and social significance of an art investment can further enhance its appeal.

The advantages of such an investment at a glance:

• Representative power of art / prestige factor
• Higher quality of life / Emotional value
• Stability / Security of the investment / Low risk of price fluctuations
• Total loss virtually impossible
• Long-term investment and possibility of passing it on to children
• New social contacts and insights into the world of artists and art connoisseurs
• Promotion and support of cultural life

Thanks to new technologies, people with small budgets can now invest in high-quality artworks by renowned artists – a promising investment for art lovers and private investors alike.

Private and corporate investors are increasingly interested in alternative investments, including artworks by renowned artists that can generate stable or even high returns. Auction houses and banks promote these investments, promising significant appreciation in the art market.

There are also art dealers who trade works by up-and-coming artists – with a higher risk profile, but also the chance of a higher return.

In general, the following picture emerges in the art market for contemporary art with regard to value performance compared to stocks, gold and real estate:

Blue chip art is more profitable than stocks, real estate, gold, wine and inflation

Few asset classes offer such rewarding growth potential as investing in blue-chip art . Not only is it profitable, but it also represents a secure and long-term investment. Since the art market is hardly correlated with the stock market, it becomes particularly attractive during volatile times.

The art market is not only enormous, but also offers considerable potential for future growth. Since 1995, the return on the top 100 artists exceeded that of the US stock index S&P 500.

Artprice 100© , the blue-chip artist index frequently cited as a benchmark, even grew by 1.8% in the Corona crisis year of 2020—a year characterized by the almost complete absence of international art fairs, but also by the forced transition of galleries and auction houses to a digital modus operandi. And yet… the prices of the 100 best artists on the art market (by auction sales) continued to rise, increasing by a remarkable 36% in 2021.

Since 2000, the prices of the top 100 artists in the Artprice Index have risen by a staggering +589% (in comparison: the S&P 500 only increased by +224% in the same period).

86% of asset managers, is an integral part of a well-diversified portfolio. If you want to invest in art but prefer a more secure approach, investing in "blue-chip art" . Similar to the stock market, blue-chip art refers to the works of the most renowned artists whose positions in the auction market have consistently remained at the top over the years.

The demand for these world-renowned artists is constantly increasing, which is why the prospects for appreciation in value and resale value are extremely positive in the future.

The same old problem: Purchase reserved only for very wealthy people

It's obvious that the most important paintings and key artists, such as Gerhard Richter or Andy Warhol, also fetch the highest prices at art auctions and on the art market. This inherently excludes most people from a potential purchase. Only a few wealthy individuals can afford sums in the six- to nine-figure range for a work of art.

Until now, it has therefore been difficult for most people to invest in valuable art. Beyond the price barrier, one also needed to be well-connected in the art world to gain access to high-quality art.

Investments in art were therefore only possible for people who possessed the necessary capital, network, and knowledge. This presented an enormous obstacle that made entry into the art market difficult.

The new solution: Art Shares and tokenization

Analogous to the stock market, which allows for the acquisition of shares in successful companies, this principle has also spread to the art market.

A small number of companies and trading platforms are utilizing the possibilities of Art Shares and tokenization, offering lucrative investment opportunities for the general public.

1. Masterworks – Buy shares in Blue Chip Art

Innovative online platforms like Masterworks now allow everyone – regardless of budget and financial resources – to participate in the strong returns of top artists.

Masterworks is the only platform where you can invest in artworks worth millions of dollars from artists such as Basquiat , Picasso , Banksy and others.

2. arttrade – Digital shares in art through tokenization and blockchain

Arttrade also revolutionizing access to the art market for all users. Using blockchain technology are tokenized in the form of security tokens , which reflect the total value of the respective artwork.

Investors can purchase these tokens and thus invest in artworks online with a minimum investment of just €250, profiting from their performance. Thanks to the use of blockchain technology, arttrade has created a technological process for fractional art investments.

To make art accessible to as many people as possible, arttrade exhibits the works publicly and free of charge in its own Art Spaces and lends them to renowned galleries, art collections and museums.

Tokens are digital certificates stored on a blockchain using technologies like distributed ledger technology (DLT), which is also used for cryptocurrencies. Blockchain technology allows assets and rights to be secured digitally and decentrally, preventing manipulation. This technology offers investors the opportunity to securely invest in assets that they can flexibly buy or sell on a secondary market (Q1/2023).

Curated blue-chip art differs from that of emerging artists, which, while more affordable, often has an uncertain future. For this reason, arttrade, with the support of experts, experienced gallerists, and art collectors, carefully selects blue-chip art for investment on its online marketplace, arttrade.io.

A proven selection process: artworks are discovered, analyzed based on data, and their current market value and potential appreciation are determined. Only the most promising works make it onto the marketplace. This selection process offers a good prospect for value appreciation, as artworks by artists such as Gerhard Richter , Andy Warhol , and others are always in demand.

3. mintus – Smart Art Investment

The art experts at mintus take care of sourcing, selecting, authenticating and evaluating art investments on your behalf, so that you can invest in and buy Andy Warhol and George Condo

The online platform gives you control to invest in art and manage your portfolio – sign up for free to see current art investment opportunities.

The paintings come from a network of respected and recognized art institutions, investors, collectors, and artists. The minimum investment is $3,000 per painting , and there is no maximum. All investors receive an investment certificate detailing the value of their initial investment and the painting in which they have invested.

Artworks are auctioned or sold privately once they reach their optimal value. After the sale, the profits, less fees, are distributed to investors. Mintus will also operate a secondary market for investors at approved locations.

Joachim Rodriguez y Romero

Owner and Managing Director of Kunstplaza. Journalist, editor, and passionate blogger in the field of art, design, and creativity since 2011. Successful completion of a degree in web design as part of a university study (2008). Further development of creativity techniques through courses in free drawing, expressive painting, and theatre/acting. Profound knowledge of the art market through years of journalistic research and numerous collaborations with actors/institutions from art and culture.

www. kunstplaza .de/