There are few things in life that are not volatile. The stock market rises and falls, much like a pendulum swinging from left to right. Crypto is viewed as a rocket ship, but its returns remain mostly inconsistent, and the housing market has seen its fair share of crashes over the years. But if you’re looking for one asset class that bucks the trend when it comes to volatility, fine art might just be it.
For centuries art has been seen as an avenue for the rich and famous to flex their wealth, but Masterworks believes its business model of allowing everyday consumers to invest in multi-billion dollar pieces of art, is shattering that glass ceiling and democratizing art for all.
Michael Wenner is the Vice President of Marketing and Director of Business Development at Masterworks, a platform that lets everyday consumers invest in pieces of art such as Banksy, Kaws, and Basquiat.
“We consider ourselves fiduciaries or financial advisors,” said Wenner. We’re doing that because art is a very confusing and brand new asset class. We’re the only ones enabling access to this $1.7 trillion market. From a suitability standpoint, to let someone Yolo their life savings into a Banksy is not something that we want our customers to do. And we also don’t think it makes sense for someone that has a $5 million retirement portfolio to put in a hundred dollars. So we’ll tell that person, just keep your money; keep the cash; put it in stocks. So we’re really getting people, not only to understand what is art as an asset class, why is art important, but to make sure they’re investing responsibly and investing a part of their portfolio, that actually makes sense.”
Their willingness to deter prospective investors may seem brash. But their view is that an investment in art is not a get-rich-quick scheme. It is a long-term investment and the ability to contribute to the art market. The creation of this new market has opened accessibility for more people to be able to invest in fine art.
“You look at art or it’s a $1.7 trillion market. Until Masterworks, there was absolutely no way to invest in it. On top of there being no way to enter it, those who did want to enter it who wanted to build a diversified portfolio would need tens of millions of dollars. You could buy one piece. And if that one piece went down in value, you’d spend a million dollars on it and you weren’t diversified. It’s not really a secure asset or a strategic asset class.”
On a recent episode of Marketing Trends, Wenner joined me to discuss how Masterworks is using centuries of data to its advantage to not just identify which pieces of art the company invests in, but also why they are opening that data up to everyone. He also dives into why he is bullish on content marketing, and how Masterworks views itself more as a financial institution rather than an art gallery. New episodes every Wednesday and Friday.