Art

Art Market vs S&P 500 Returns

0.10%

Versus S&P

-19.70%

36 minutes ago

0.10%

Versus S&P

-19.70%

36 minutes ago

6m High

6m Low

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Fine Art

551.82

500.40

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S&P 500

4,796.56

3,666.77

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Fine Art

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S&P 500

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Does not follow the stock market

Sources: Artprice Contemporary Art Index, SPX

    Reasons to Invest

  • Physical assets like fine art have historically provided an inflation hedge for investors
  • Contemporary art is a fast growing market which gained 63% in value through the pandemic
  • Invest in a tangible asset that holds both financial and cultural value
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Highlights

Time Horizon

7-10 years

Diversification

Multimillion-dollar artwork has long been a cornerstone of investing for the ultra-wealthy, and for the past few decades, it has returned remarkable performance. Over the past 10 years, value of blue-chip contemporary art has risen 132%. (Deloitte estimates the total value of the art market to be $1.7 trillion.) One major perk of art as an asset is that its value doesn’t rise or decline with the stock market, which makes it a great investment to diversify your portfolio and safeguard against stock market dips or crashes.

Contemporary art has offered a healthy annual return over the last 10 years. 

avg

+7.9%

Avg Annual Returns

Past 10 years

Ways to Invest

Compare Collectibles Returns

Risk Score

6M Growth

Art

Artprice Contemporary Index

32

+0.11%

Wine

Liv-ex 1000

35

+11.05%

Risk Analysis

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Risk Analysis

As of 07/02/2022

Low

Compared to

S&P 500
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Fine Art

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S&P 500

Low

The fine art market continues to boom and can be a great way for investors to preserve wealth, experts say. Art serves as a hedge against inflation. "Artworks are a physical asset, and physical assets tend to perform well in inflationary times." -Cynthia Sachs, CEO of the Athena Art Finance Corp.

Major risks associated with collectibles like art include high costs and fees, a lack of investment income or dividends until sale, prevalence of counterfeits and a greater than average risk of destruction of the assets.

Drawbacks

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    Drawbacks

  • Historically, fine art investing hasn't been accessible to most investors due to the exclusivity of the fine art world and the high price tags on artwork.
  • There are a lot of extraneous costs associated with art investing, including auction fees, appraisal fees, and storage. Art investments are also typically taxed at a higher rate because they're considered collectibles.
  • Artwork is highly illiquid. Finding the right buyer takes a lot of time and planning.
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How You’re Taxed

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How You’re Taxed

Capital Gains

Capital Gains

Income Tax

Income Tax

If you are investing on an art investment platform like Masterworks, where you own a fraction of or a percentage of an artwork:

  1. Sale of artwork: If the artwork is sold, you receive the equivalent of a dividend. Your profits are then taxed as income.
  2. Secondary market: If you trade your shares on the secondary market, your profits are taxed as capital gains.

For those of you selling artwork you purchased, art investments are classified as ‘collectibles’. Gains on art held for one year or less are taxed as ordinary income—the same tax treatment as short-term capital gains (STCGs). Gains on art held more than one year are taxed as long-term capital gains, except the maximum tax rate for capital gains on collectibles is higher than other assets at 28%.

Did You Know?

  • poitStarForbes estimates Jay Z’s art collection at $70 million.
  • poitStarIn 2017, a Leonardo Da Vinci (1452-1519) painting titled ‘Salvator Mundi’ sold for a record breaking $450,312,500
  • poitStarDuring the financial crisis in 2008, even as the stock market was bottoming out, art auctions were breaking records—Sotheby's held their most lucrative auction ever, raking in $362 million in one evening.

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