I Like My Money Right Where I Can See It – Hanging On My Wall
by Baeleit on Aug 22, 2023
Surround Yourself with Beauty and Value
Investing in art is like sprinkling glitter on your investment portfolio. It adds a touch of sparkle and enchantment that other assets simply can't match. While stocks, bonds and gold have their merits, they don't have the power to transport you to a world of beauty and inspiration. Art, on the other hand, can capture the essence of emotions, memories, and stories, transforming your walls into a masterpiece of personal expression. It’s not an impersonal spread-sheet or graph; you literally can see and share your investment every day in your home or office. It's an investment that not only appreciates in value but also fills your surroundings and spirit with joy and wonder.
Art is the secret ingredient for a well-diversified portfolio. While stocks and bonds may have their ups and downs, art offers a unique stability and diversity. According to altexchange.com, from 1995 to 2020, the S&P 500 returned an average of 9.9% per year. Meanwhile contemporary art returned an average of 14.3% per year during the same period. That’s nearly 5% higher per year during a period of great transition and world-changing events.
The art market is a breeding ground for potential growth, with quality pieces increasing in value over time. This means that while your other investments may be going through a rollercoaster ride, your art investment can be a safe harbor and steady ship in the rocky storm of market volatility. For those looking for exponential growth, it’s also not uncommon for works from emerging artists to grow 1000%+ in a short period of time. It’s well documented, for example, that a Basquiat painting soared 2,209,900% when it was bought for $5,000 and sold for $110,500,000 in 2017! The key, like buying stocks, is knowing which artists and pieces represent the greatest short and long-term value.
Do Your Homework
Of course, investing in art isn't without its risks. Unlike buying and selling stocks with a few clicks in your brokerage account, purchasing art is a bit more complex. It takes time and effort to find the right artist (and broker) to transact the best purchase. The value of art is often described as “the eye of the beholder” and can be as subjective as picking the perfect Persian carpet. The value for investment-level art pieces are influenced by societal trends, the reputation of the artist, and the demand in the market. Remember, one of the most famous artists of all-time, Vincent Van Gough, was considered unsuccessful and had trouble selling his works during his lifetime. Now, Van Gough pieces are world-renowned and hang in the most prestigious collections across the globe.