The Fine Art Market: An Investment Trophy

Fine art has always been seen as a safe place to invest your money, offering returns over time as an artist’s popularity increases. Volatile changes in the stock market do not have the same impact in the art world. Keeping an eye on emerging artists can be one of the smartest forms of fine art investment, especially as the demographic buying art is changing, with younger and newer collectors entering auctions; the industry has become much more accessible. Whereas before auctions were for exclusive groups, these days you can watch auctions from the comfort of your computer screen or television, inciting interest from newer audiences.

 The global art industry is one that bounced back massively following the pandemic, with auction houses recording a boom in sales. Sales of impressionist, contemporary and post-war modern art have resulted in some of the most successful auctions in recent years. The infamous African American street artist Jean-Michel Basquiat in 1982 created the piece ‘Untitled’, a painting of a horned African mask surrounded by a myriad of crayon-like colours and textures. In 2004, the artwork sold for $4.5m. 12 years later, it sold again for $543m. Finally, the work was auctioned in 2022 for $85m to a buyer in Asia. This is just one example of the exponential rise in value artworks go for, with some others including Andy Warhol, whose piece titled ‘Blue Marilyn’ recently sold for $195m, becoming the highest recorded sale of a 20th Century artwork.

In recent years, investors interested in blue-chip artists have been able to purchase shares through Regulation A offerings on alternative investment platforms. Buyers in the market, such as Masterworks, are contributing more money than ever before by purchasing iconic blue-chip art, securitising them, and selling shares. Especially during this time of geopolitical uncertainty, with stock markets falling and inflation rising, the art market is booming, as tangible assets are becoming even more lucrative as savers look for a good store of value. Unlike other types of investment, fine art gives aesthetic pleasure and a physical trophy.

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