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If you’re relying solely on traditional assets like stocks and bonds for your retirement savings, it’s time to think outside the frame. According to experts, diversifying your portfolio with alternative assets can unlock significant opportunities and reduce long-term risks.
A Goldman Sachs study reveals that allocating a portion of your investments to alternative and real assets, including private equity, real estate and art, can enhance returns and drive financial growth. Even major investment firms like BlackRock Inc. and CalPERS recommend dedicating a significant portion of assets to alternatives. One alternative asset that’s capturing the attention of renowned investors in 2023 is art.
The Rise Of Art As An Investment
Figures like BlackRock CEO Larry Fink and hedge fund managers Steve Cohen and Ken Griffin, esteemed leaders in the financial world, have recognized the potential of art as an investment and put their money behind it. Their exclusive access to this market has contributed to their outperformance compared to regular investors. Now, everyday investors have an opportunity to participate in the art market.
Making Art Investable
Until recently, the art market remained exclusive to the ultra-rich. But Masterworks is changing that narrative. By joining Masterworks, everyday investors gain access to a market that historically offered limited opportunities. With Masterworks managing due diligence, purchasing and storage, investors can benefit from this once-inaccessible asset class.
Investing in fine art opens the door to a $1.7 trillion asset class that has traditionally been reserved for the wealthy. With its hedge against market volatility, fine art presents a compelling alternative to stocks, bonds, real estate, gold or cryptocurrencies. Deloitte predicts a $900 billion capital inflow into the art market by 2026.
Masterworks is revolutionizing the way people invest in art by leveraging its comprehensive database to identify artworks with high price momentum. It acquires these valuable artworks, handles storage and divides them into shares that everyday investors can acquire at a fraction of the original price. This innovative strategy is particularly advantageous as contemporary art prices have outpaced the S&P 500 by more than 2 to 1 since 1995.
Growth Of The Global Arts Market
The arts industry is not just capturing investors’ attention of investors. It’s also experiencing phenomenal growth. In 2023, the global art market expanded from $441.02 billion to $579.52 billion, showcasing a compound annual growth rate (CAGR) of 31.4%. This exponential growth highlights the increasing significance and value of the arts industry.
A Promising Future For Art Investing
The growth of the art market shows no signs of slowing down. Experts predict that by 2027, the art market will reach a projected worth of $682.08 billion, exhibiting a steady CAGR of 4.2%. Art exhibits the lowest correlation to equities among alternative assets, offering potential protection against stock market declines.
This long-term potential and enduring appeal of art as an investment make it an attractive option for investors seeking sustainable growth.
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This article The Ultra-Wealthy Love This $579 Billion Recession-Proof Industry Outperforming The S&P 500 originally appeared on Benzinga.com
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© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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