In a world where traditional investments can sometimes feel monotonous and detached, art investments offer an alternate path. Art marries aesthetic appreciation and financial potential, making it an enticing option for those seeking to diversify their investment portfolio.
Historically, the art market has been regulated to the elite as the barriers to entry, cost and knowledge, are typically too high. Artfi, an investment platform that fuses blockchain technology with fractional ownership, changes that. Art investors and patrons can now own a fraction of a painting with as little as $100. By purchasing on the blockchain, investors are also guaranteed an ironclad provenance that is tamper proof. Artfi has no democratized art ownership and ensuring that the benefits of art as an investment class are available for all.
Below you will discover why art is a fascinating asset class as well as why Artfi is the platform to help you invest in art.
Track Record of Long-Term Returns:
Historically, the art market has a remarkable track record. Art continues to appreciate in value and often outperforms traditional investment vehicles. Case in point, according to Artprice, blue-chip art has outperformed the FTSE 100 index by 407% from January 1st, 2000 to December 31st, 2022. This track record speaks volumes about the potential for art to yield significant returns, making it an enticing asset class for investors.
Diversification & Risk Reduction:
Diversifying your investment portfolio is a fundamental principle of risk management. Art offers an excellent opportunity for diversification, as the art market does not move in tandem with traditional asset class like stocks and bonds. This lack of correlation means that when the broader market experiences fluctuations, art investments can serve as a hedge against potential losses. Studies have shown that including art in a portfolio with an expected return of 10% can reduce the overall risk from 10% to just 7%.
Non-Correlated Asset:
Art is considered a non-correlated asset, meaning its value may not be influenced by the same economic factors that impact traditional financial assets. This characteristic is particularly valuable during periods of economic uncertainty, geopolitical instability, or shifts in interest rates. While stocks and bonds may face day-to-day turbulence, art can retain its value, providing stability and resilience to your investment portfolio. It’s worth noting that more than 85% of wealth managers recommend including art in a balanced investment portfolio.
Tangible Asset:
Investing in art offers a unique advantage in that it’s a tangible asset. While its investment value may fluctuate, the intrinsic value of an art piece can be appreciated aesthetically. Unlike stocks or bonds, art can be displayed and enjoyed, offering a tangible and emotional connection to your investment. In a world where many investments are purely financial, art’s tactile nature adds an enriching layer to your portfolio and life.
Art Outperforms Other Passion Investments:
Art’s allure extends beyond financial gains. It can act as a representation of our passions and interests. Luxury collectibles, such as art, often become the most satisfying form of portfolio diversification because they align with personal passions. The investment becomes doubly rewarding when these passions also translate into substantial financial returns. The ability to merge personal interests with investment strategy is a unique aspect of art that sets it apart from other asset classes.
Geographic Arbitrage:
Art’s status as a global asset is a significant advantage for investors. It is traded in multiple jurisdictions, which creates opportunities for cross-exchange rate discrepancies and tax-efficient arbitrage. This global accessibility also results in worldwide demand for investment-grade artists, driving up the prices of artworks. This phenomenon has led to art’s continued outperformance in comparison to other investment options, including the stock market, watches, whiskey, and wine.
On the Artfi platform investors buy a fraction of a vetted, reputable piece of art which will be sold when the market is right. This ensures investors initial investment increases. Investing in art with Artfi offers a combination of financial potential and personal satisfaction that few asset classes can match. The art market’s track record of long-term returns, globalized market, and more contribute to its appeal.
Artfi, with its expertise in the art investment space, can be your ideal partner on your investment journey. By leveraging the benefits of art investment, including geographic arbitrage and the potential for impressive returns, Artfi provides a platform where you can explore, invest in, and appreciate the world of art as a rewarding and diversified addition to your investment portfolio. So, if you’re considering diversifying your investments, Artfi might just be the compelling and holistic solution to help you achieve your financial goals.
