In terrifying markets like we’re experiencing today, the wealthy have always found smart ways to protect and grow their wealth.
For example, they invest in luxury apartments in New York or London, or bars of gold.
But recently, they’ve been turning to something new.
The CEO of BlackRock, the world’s largest asset manager, calls this new investment “one of the greatest stores of international wealth.”
Today, I’ll explain what this investment is, and show you how to get access to it for less than $100.
The King Speaks
As I mentioned above, BlackRock is the world's largest asset manager.
As of January 2022, it had $10 trillion in assets under management.
So when Larry Fink, its CEO, makes a claim, it pays to listen.
What’s Fink been saying recently?
“Contemporary art is one of the greatest stores of international wealth right now.”
Three Reasons the Wealthy Invest in Art
There are many reasons that art can be such a powerful investment.
For starters, it provides diversification. So even if the stock market keeps crashing like it’s been doing recently, art can keep growing in value.
Furthermore, art offers a hedge against inflation. In inflationary times like we’re in today, that’s a valuable trick.
But perhaps most important of all, art can provide market-beating returns.
For example, since 1995, one popular art index has outperformed the broad-based S&P 500 by nearly 3x.
Perhaps these benefits help explain why, according to the Knight Frank Global Wealth Report, 37% of individuals worth at least $30 million collect or own fine art.
But now, art isn’t just for the super wealthy anymore…
Masterworks is an online platform for art investment.
It aims to make blue-chip artwork investable for everyone.
The way it does so is through fractional investment. For example, even if a piece of art is selling for $1 million, you can buy a small fraction of it.
In many cases, minimums are just $100, and sometimes they’re as low as just $20.
Furthermore, you can sell your fractional shares to other investors through Masterworks’ secondary market. Certainly, there are no guarantees that someone will buy your shares. But as the platform grows in popularity, it’s likely that liquidity will grow.
Current offerings include a Picasso:
And a Rothko:
Keep in mind, all the typical caveats about investing apply here:
For example, don’t invest more than you can afford to lose; invest in what you know; and be sure to dip your toe into the water before diving in.
Furthermore, despite Masterworks' secondary market, its art may not be entirely “liquid.” That means these investments can’t necessarily be converted into cash at the snap of your fingers.
So don’t invest your rent or grocery money here.
But if you’re looking to invest like the rich, art can be a great place to start!