Retirement Investing

Masterworks Review: Investing In Fine Art Made Simple5 min read

Aug 14, 2021 4 min

Masterworks Review: Investing In Fine Art Made Simple5 min read

Reading Time: 4 minutes

Thanks to Masterworks, there are lots of people investing in art today. With NFTs growing alone, art is perhaps where most gains are to be made today. If you are interested in investing in something and are still undecided, then read on, and maybe our article will help you decide. Today we will talk about Masterworks, a platform enabling everyone (with money) to invest in fine art.

Fine art has become more attainable to people, partially due to the emergence of platforms such as Masterworks. And you would not believe it, but now you have a chance to become a fractional owner of some high-valued artwork. Read on for our comprehensive Masterworks.io review.

Masterworks Review

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What Is Masterworks?

Masterworks.io is a company, and an online platform changing the way artwork is owned; in other words, this company enables small art collectors to have partial ownership of famous works of art.

The CEO of Masterworks, Scott Lynn, stated that the company aims to enable anyone interested in investing to invest in art. It does this by allowing an affordable entry point for small-time investors.

This New York-based company has become a significant player in the art market. The company is based on a simple principle which many people have found really appealing, and it is why Masterworks is now the go-to place for people interested in art investments.

How Masterworks Works

Masterworks works on a simple principle: it sells fractions of famous art pieces to its investors. This way, investors can co-own a famous piece of art at a much lower price without it losing its value. Generally taken, here is the main Masterworks operating principle:

  • Masterworks looks for art pieces that can only grow in value
  • They purchase the valuable artwork at the best possible price
  • Then, they file an offering, enabling anyone to invest
  • Then, the investor can hold on to their share and wait for the artwork to sell. Or the investor can sell their shares on a secondary market.

This is a simple operating policy, and it helps smaller collectors make a return on their investment. The Masterworks art experts follow the trends and aim to purchase the best works from specific artists whose work is valued.

To prevent scams and ensure legality, after purchasing a piece of art, Masterworks qualifies it with the SEC (Securities and Exchange Commission) to securitize the art. Only then is the artwork offered for sale on the Masterworks platform.

After a person invests in the artwork, they can wait for it to increase in value and sell, and they receive their share of the sale. Many times, people who need money fast can opt to sell their shares for profit on the secondary market.

The investment in art is often compared to investing in real estate, partially because art is timeless, so they rarely lose value over time, making this a very secure investment.

masterworks investing

Notable Artists Sold on Masterworks.io

While the Masterworks art experts continuously scour for new artists and pieces, there are some very famous names whose works you can find here:

  • Andy Warhol
  • Jean-Michel Basquiat
  • Banksy
  • Kaws
  • Yayoi Kusama
  • George Condo
  • Keith Haring
  • Mark Rothko
  • Alexander Calder
  • Zao Wou-Ki

Masterworks Fees

The fees charged by Masterworks are very similar to those charged by a hedge fund. While most hedge funds charge a 2 and 20 (2% annual management fee and 20% of profits), Masterworks charges 1.5 and 20. It means that the investors will have to pay a 1.5% annual fee and a 20% fee of the profits. The appeal here is the all the fees are in the form of equity, and there is no need for any out-of-pocket expenses.

The management fee covers professional storage, insurance, regulatory filings, administrative costs, and annual appraisals. After all the expenses and fees are deducted upon sale, the most common return is about 7.5%, which is near the stock market average. However, Masterworks usually aims to sell the artwork via private party sales, which have much lower costs than an auction.

If you have only one investment, this may not amount to very much, but if you have multiple investments with different types of paintings that sell, you can expect a significant return.

Masterworks Secondary Market

To help its investors, Masterworks has built a secondary market where investors can buy and sell their shares in the artwork. Every fractional share can be listed on the market, and you can sell your shares for some profit. The market has historical data from sales and you can estimate the return should you decide to sell your share.

To Wrap Up…

Masterworks is an exciting platform with a unique premise, and many people find the idea of investing in fine art quite attractive. Many people also do this to diversify their investment portfolio and have found financial success.

Still, as the future is uncertain, there is no way to guess how an investment will pan out. At this time, Masterworks intends to hold the art for three to ten years, so there is no way of predicting or guaranteeing anything for sure. However, if you are an art lover and have some money to invest (but we suggest this be money you can afford to lose, considering the time for the return of investment), you can give Masterworks a try.

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Contact Information

Name: Masterworks.io, LLC
Address: 497 Broome St, New York, NY 10013
Phone Number: 203-518-5172

If you’re looking for more information on Masterworks.io, feel free to reach out to us here on MyRetirementPaycheck.org. It just might be the investment vehicle you need for boosting your returns. That said, keep in mind that there are no guarantees here when investing in art. There is plenty of risk to consider so be sure that you know what you’re getting into before investing.

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