If you’re new to investing, knowing how to invest in art can be challenging, but thanks to the internet, anyone can now buy and sell art without going through a go-between.
Some people can make $1,000 in investments and watch their returns thrive because of smart art investing.
But how do you find the most profitable art pieces to invest in?
With careful planning and research, you can make an art investment that fits your budget, meets your financial goals, and makes it one of the best investments in your portfolio.
So let’s talk about how to invest in art and buy art so you can get started this year!
Places To Invest In Art
Whether you’re more interested in surrealism, Renaissance art, contemporary art, or anything else, there are many places to use to make investments in the arts.
The most popular include a gallery, investments in art funds, online auctions, and private dealers.
Each has its own advantages and disadvantages, so it’s essential collectors do research before making a purchase.
So let’s see what you could add to your investment portfolio:
In the world of digital art, NFTs, or Non-Fungible Tokens, are a relatively new invention.
They were first created in 2014 and are based on the same source code as other cryptocurrencies.
However, these NFTs are different from other cryptocurrencies because they represent real-world things like art, music, and in-game items.
NFTs have quickly become popular in the art world as a way to invest in digital art. They are typically one-of-a-kind and can be stored easily as they don’t require physical space like traditional artwork.
Another advantage is that NFTs can be resold easily on online marketplaces. And because NFTs are stored on the blockchain, they are secure and cannot be counterfeited.
It’s critical to conduct your study and understand the fine art market you’re entering before investing.
You risk losing your money, just like any investment, but there’s potential for rewards if you pick the appropriate asset for your portfolio.
If you’re interested in investing in NFTs, there are a few things you need to know:
- First, you’ll need to find a market or online brokerage where you can buy and sell NFTs. We recommend trying out Coinbase, but you have some other options to check out too.
- Second, you’ll need to understand how pricing works for NFTs and how much money you can invest in art.
- And finally, you’ll need to be aware of the risks involved in investing in NFTs.
For many people, art investing is done through art galleries. Galleries typically represent a variety of emerging artists or established pros, and can offer a wide selection of artworks to choose from.
It can be a great way to get started in the art market, as you’ll have access to various artists and artwork in one place, and seeing things in real life can be better for hands-on investors.
The owners or curators can give art investors insights into the local art scene and may even be able to introduce you to some up-and-coming emerging artists.
Fine art gallery (Blue Chip Art)
A fine art gallery typically sells a fine art asset class of contemporary art by established artists, also known as blue-chip artists.
These fine art artists have a proven track record in the art market of producing quality fine art that retains its value over time.
Investing in blue-chip artists is generally considered a less risky investment, as blue-chip art tends to appreciate over time and has a more substantial track record than other art.
Masterworks is an art investment platform that allows you to invest in blue-chip art by well-known artists like Pablo Picasso and Andy Warhol.
They sell fractional shares of the painting for as little as $20 per share. Read our full Masterworks review here.
Art dealers can show you how to invest in an asset class, from traditional paintings and sculptures to more modern pieces.
Art dealers can provide guidance on what kinds of art could be a good investment based on your budget and the current market.
They can also help you find the right piece of art for your home or office and even provide advice on how to care for it.
When working with an art dealer, you should be clear about your goals and what you hope to achieve with your investment. That way, they can better investigate art that fits your criteria.
Art auction houses sell artwork from different periods and styles and can be a great way to get a good deal on artwork for your portfolio!
Before you go to an auction house or use online auction houses, do your research. Familiarize yourself with the prices of similar artwork, and learn about the different auction houses.
It’s also a good idea to visit an auction premier, so you can see the artworks of up-and-coming artists and get a feel for the atmosphere of the auction houses.
But don’t get caught up in the bidding when you’re at the auction house. Stick to your budget and only bid high on artwork if you’re serious about making a higher-priced investment.
If you’re the successful bidder, congratulations! You’ve just made a significant long-term investment in the art world that may boost your portfolio.
If you’re interested in making a good investment, check out regional art fairs.
An art fair offers a unique opportunity for art investors to buy art for their portfolios.
These events provide a curated selection of art from around the world, often from top galleries and artists.
This makes it a great place to find high-quality pieces from the art market that will appreciate over time.
Besides finding artwork that will appreciate, art fairs also offer art investors the chance to meet the artists and gallery owners in person.
It can be a great way to get insights into the art industry and learn about upcoming trends.
Art Investing Know-How
There are many different types of art you can invest in. Some art investors prefer fine art investing; others invest in sculptures. There really isn’t a limit to what artists can produce!
It depends on your preferences and what you think will hold its value over time.
However, if you choose wisely, the pieces you invest in will appreciate over time and can be passed down to future generations.
There are many different ways to invest in the global art market, but you must do your research before you get started to avoid scams and other pitfalls.
Here are some things you need to know about art investing:
- Art can be considered an alternative asset class that has the potential to provide you with returns on a good investment.
- It’s illiquid, meaning it can be difficult to sell quickly. It’s something to keep in mind when investing, as you may be unable to recoup your investment immediately.
- Learn about the different types of art investments. Don’t invest in just any art you come across, even at a “good deal.”
- Make sure you know what physical asset you’re buying and the fair market value of the piece.
- Do your research before investing in any piece. Research the artists and galleries you’re interested in.
- Find a reputable art investment advisor. Talk to experts to get their opinions on a piece.
- Always inspect the condition of the art before purchasing it.
- Don’t invest in buying art with more money than you can afford to lose.
- Check out local art market reports and more on Art Basel; Art Basel has a lot of information that can help new art investors
How To Invest In Art
Here are a few steps you can take to start investing online, starting with an NFT Global Art Market:
Join An NFT Site
If you’re interested in investing in art, the best way to do so is by joining an NFT site or an online brokerage with NFTs, like Coinbase.
NFT sites are online platforms where you can buy, sell, and trade digital assets known as non-fungible tokens. These unique tokens can’t be replicated, making them a valuable investment.
Most NFT sites allow you to buy, sell, or trade any digital art, so you’re not limited.
Joining an NFT site is simple. Just create an account and deposit some money into your account. Once you have money in your account, you can start buying NFTs.
When you’re ready to sell your NFT, you can do so on the same site that you bought it from. Or, you can transfer your NFT to another person or platform.
NFTs are stored on the blockchain, so they’re very secure. Plus, they can be easily transferred and traded because they’re digital art.
Start Your Digital Wallet
The first thing you need to do when you want to invest in art is to start a digital wallet.
A digital wallet is an online account where you can store digital assets and keep your payment methods safe and sound.
There are many different digital wallets to choose from, like PayPal, CashApp, Venmo, and more, so find one that’s right for you to keep your digital funds.
Once you’ve picked a digital wallet, you’ll need to create an account and deposit money into your account. Once you have money in your account, you can start buying NFTs.
Bid On Art Pieces Digitally
Once you have a digital wallet, you can start bidding on artwork. NFT sites usually have auctions where you can bid on NFTs in addition to buying outright from artists.
When bidding on an NFT, you essentially agree to pay a certain amount of money for the NFT if you win the auction. You won’t have to pay anything if you don’t win the auction.
However, if you win the auction, you’ll be required to pay the amount you bid for the NFT. Once you’ve won an auction, the NFT will be transferred to your digital wallet.
OR Go To Places & Buy/Bid On Art
If you’re interested in investing in art, you can also go to galleries and auctions to buy or bid on art. This is a more traditional way of investing in art, but it can be just as effective as joining an NFT site.
When you’re at a gallery or an auction house, you’ll be able to talk to other art collectors and see the piece in person before deciding to invest in it. It can be a great way to get a feel for the piece before deciding.
Pros & Cons Of Art Investments
- High ROIs over time
- Art is an investment you can see and enjoy
- Can be passed down through generations
- Diversifies your investment portfolio
- The art world is always growing with new pieces
- High investment minimums
- Slow ROI
- Low liquidity
Here are some frequently asked questions about art investments to help you get started:
How profitable is art?
Art can be quite profitable, although it may not always be a quick or easy investment. Just like the stock market, patience and research are key when investing in art.
Those willing to take the time to learn about the market and build up their collections slowly are often the most successful art investors.
Where should I buy/bid on art?
Local galleries, online art auctions, and art fairs are good options for buying and bidding on art.
I also suggest you join Masterworks to get fractional shares into many art pieces.
What are some of the risks associated with investing in art?
The most common risk of investing in art is that the value of the art may not appreciate as much as expected.
Additionally, any piece of art could be damaged or lost. Plus, art is an illiquid investment, unlike most of the stock market.
If you want to learn more about art investing, I suggest checking out Art Basel and seeing their global art market reports.
How long will I wait for my ROI?
It’s important to remember that patience is key when investing in art. An art investment is something you buy and hold onto it until it increases in value.
The time frame for ROI can vary depending on the type of art you invest in. Some art could appreciate in value quickly, while other art may take longer to appreciate.
How does art investing work?
There are primary and secondary markets to invest in art.
The primary investment tactic is going and paying money upfront to own art pieces that you’ll own and store.
You’ll care for it as it’s value (hopefully) appreciates, and then find a new buyer to profit off the art.
The second market is investing in an art fund with an investment platform.
Similar to a mutual fund, an art fund gets money from multiple contributors (aka art investors), and each person gets a fractional share of ownership.
Art investment funds pay out profits when the art sells.
What else can I invest in?
You don’t see art funds on many investment platforms, but you have options for many other investments.
Some other options include stocks (some even offer free stocks), bonds, real estate, and cryptocurrency:
- Robinhood: Robinhood is a DIY investment app where you can invest in stocks, cryptocurrencies, and EFTs with no commissions. Learn more about this DIY investment app in our Robinhood Review!
- Acorns: Acorns allows you to invest in a variety of things, including EFTS, stocks, and bonds. The app is simple to use and can be a great way to get started in investing. Plus can round up your purchases to invest spare change.
- Betterment: Betterment is a Robo-advisor that allows you to invest in a variety of things, including stocks, bonds, and real estate. Our Betterbement Review shows how this Robo-advisor offers a hands-off approach to investing, which can be helpful for new investors.
- M1 Finance: M1 Finance is another Robo-advisor that has pre-made portfolios you can choose from to match your risk tolerance. M1 Finance offers retirement funds, stocks, real estate, and more for investing.
Key Takeaways: How To Invest In Art
But now is the chance to learn and see if you can grow your wealth through the art market!