Why Fine Art Can Beautify Your Portfolio

Often when we look at investment portfolios, we think broadly about the asset classes within it. These typically include property, stocks, bonds even currencies.

However, with the increase in global geopolitical insecurity, fluctuating economies and skyrocketing country debt in many developed nations, there is never a better time to diversify your portfolio – in fact, why not make it look beautiful while you are at it?

Not only beautiful in terms of profits and returns but looking beautiful as you are creating your nest egg. This is not something that can be done through just any asset class – when was the last time, you put your share portfolio on the wall?

Fine Art, however, is something that you can not only put on the wall but will appreciate in value and can bring annual revenue to your portfolio for you to reinvest or enjoy!

The broad art market has provided compound annual returns of 5.7 per cent in the last 30 years and 8.8 per cent for the last 60 years, says Michael Moses, founder of consulting firm Beautiful Asset Advisors.

With this sort of sustained asset growth over a long period of time, there is no wonder that the art market as a whole has seen a dramatic increase in overall value and volume over the past few years. The global art market grew about 12 per cent in 2017, with about $63.7 billion in sales.

So, what can making your portfolio more beautiful do for you, really?

With fine art, purchasing the ‘right’ piece or pieces to diversify your portfolio can not only hedge against risk, but it can realise real returns almost straight away. As mentioned previously on average with a 5.7% return on the whole market is a start. However thorough carefully selecting your piece of art from up-and-coming artists, who are in demand or are about to be is the key.

Similar to picking a ‘stock’ on the rise, experts can work with you to identify who these artists are within your price range and how you can well exceed market value in asset appreciation over the time period you expect to hold the artwork for.

What about recurring revenue?

If you lease out your property or have stocks that return annual dividends, then your investment is realising not only the asset appreciation but is providing income – for you to invest or use as you see fit.

Until recently, Art wasn’t able to offer much in the way of recurring annual incomes, but thanks to companies such as Art Works offer an annual leasing income of up to 6% per annum on your works. Corporates, private, government and hospitality clients to name a few are looking for leasing options on fine art to create the ultimate environment – but don’t want to own the pieces for whatever reason.

As such, you as an investor can enjoy asset appreciation to your portfolio and solid annual returns on leasing through partnering with Art Works. Speak to the expert team today and start to ‘diversify & beautify’ your portfolio.

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