Unlocking Art as an Alternative Investment

Art as an alternative asset

Alternative investments will be one of the top investment trends in 2023, according to Forbes. “The portfolio for 2023—no matter your net worth, risk tolerance, or time horizon—should include an increased allocation to alternatives,” writes author and former financial advisor, Erika Napoletano. The analysts at JP Morgan Private Bank write that alternative asset classes have historically “proven their worth … [and] traditional markets alone may be unlikely to provide the return, income and diversification that many investors seek.”

Fine art is a promising alternative investment. With historically low correlation to traditional markets, art investment can provide a hedge against rising inflation and economic volatility. But not every artwork increases in value. Successful artwork investment requires trusted market expertise, ongoing diligence, and proactive management: services not available to the typical investor. Artory/Winston’s offerings give you exactly that. We create our offerings to provide our expertise, network, and technology to investors in the form of robust artwork investment opportunities that can help you invest effectively in the art market.

Art as an Investment

Art has historically been uncorrelated to the S&P 500*. The strong positive correlation between art and gold demonstrates art’s potential as a stable, value preserving asset class and buoy against inflation. Art has also historically been able to rebound and even grow faster than traditional asset classes during financial turmoil. Following the 2020 recession, the art market recovered strongly in 2021 with aggregate sales even reaching above pre-pandemic levels.

In 2021, aggregate sales of art and antiques by dealers and auction houses reached an estimated $65.1 billion, up by 29% from 2020. Source: UBS & Art Basel Art Market Report 2021 by Dr. Clare McAndrew.
Auction sale data for the report is provided by Artory.
* The top performing artists have outpaced the S&P 500 for over 20 years, showing art’s resilience as an asset. Source: Artprice.com

Beyond value-preservation and low volatility, art also has the potential to deliver substantial returns. According to the Artprice100 index, the top performing artists have outpaced the S&P500 for over twenty years, showing art’s potential as an asset. Incredible resale success stories are possible in the art market as well. In their Resale Analysis of Marquee Evening Sales for New York, November 2022, ArtTactic identifies Betye Saar’s “Rainbow Mojo” (1972) as an example of such a success story. The artwork was bought in 2013 for just $960. This November, “Rainbow Mojo” was sold at Sotheby’s for just over $375,000, delivering a total return of almost 40,000% to the seller.

Access the Art Market

Success stories like that of “Rainbow Mojo” are not the norm. It takes experienced advisors in the market to access and understand which artworks have the highest potential to excel.

Artory/Winston creates unique investment opportunities by sourcing the finest artworks with high potential to grow in value and generate strong returns for our investors.

Combining Artory’s industry-leading art registry technology with Winston Art Group’s deep market expertise, we select artworks at the right valuation with verified provenance. With these assets, Artory/Winston advises on investment vehicles that feature due diligence certification secured on the blockchain and the flexibility and liquidity of tokenization.

On Securitize, investors can choose to invest via tokens in a diversified portfolio of blue-chip, mid-career, and emerging artists sourced by Winston Art Group. As one of the first diversified and tokenized art funds in the world, this fund aims to reduce risk with the diversification of artists, art categories, and price points. Plus, investors who choose tokens can then trade on an regulated secondary marketplace.

Through our single artwork offering, now available for investment on Republic, art lovers and collectors can join seasoned investors and participate in the art market at an accessible price point. Artwork investing is finally available to everyone using experienced partners.

Artory/Winston has created the next generation of portfolio diversification with investment opportunities built on top of trusted alternative assets.

*Information provided here is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.

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