As an investment, artwork is an interesting alternative asset to consider. It helps create a diverse portfolio, and historically, artwork hasn’t correlated strongly with other asset classes. But on the other hand, artwork can be highly illiquid, and it doesn’t generate income.
Investing in artwork is also complicated. There are different eras and styles to consider, and you have to ensure authenticity. Plus, only one percent of all artists generate over half of artwork that’s sold globally, so it’s vital to find the right artists to invest in if you decide art belongs in your portfolio.
Thankfully, there are plenty of established and emerging artists with strong track records for investors that you can consider. In today's post, which is brought to you by Masterworks, we’re exploring some of the most popular modern and contemporary artists you can invest in right now.
Modern vs Contemporary Art Investing
When looking for potential artists to invest in, one easy way to begin your search is to compare contemporary and modern artists.
Despite the name, modern art refers to artwork created from the 1880s up until the 1970s. Contemporary art refers to artwork created after that time up until the present day. This means that many famous works of modern art are from artists that have passed away, while many of the great contemporary artists are still alive.
There’s no single best period to invest in. However, works from famous modern artists like Picasso and Pollock can be more expensive for collectors than some contemporary works from artists who are still creating. And the contemporary artwork world also has emerging artists who are still building their portfolios and reputations, so you can potentially invest at an earlier stage before an artist’s career has taken off.
Granted, you can still invest in both modern and contemporary artwork and see potential returns if you purchase at the right time and the pieces appreciate. But understanding these two time periods is important before beginning your search.
6 Best Artists to Invest In Today
There are thousands of potential artists you can invest in across different time periods. And, since artwork is inherently quite subjective, there’s no single “best” artist you can invest in.
That said, the work from certain established artists have historically shown strong appreciation potential. And even some emerging artists are making a splash in the art world right now and could be worth investing in.
Here are 6 of the best artists to invest in right now based on their popularity and the historical price trends of their pieces.
When it comes to contemporary artists, Banksy is perhaps one of the most well-known. The street artwork from this anonymous graffiti artist has taken social media by storm, with pieces like “Girl with Balloon” being immediately recognizable.
The anonymity surrounding Banksy is part of what makes this artist so alluring, as well as his often cheeky political commentary. But Banksy isn’t just a social media sensation. Pieces like Sunflowers from Petrol Station have sold for over $14 million at Christie’s auction. And even a piece that Banksy had rigged to self-destruct at auction sold for over $1 million while stunning onlookers.
Of course, buying a Banksy outright is unrealistic for many investors due to the high entry price. However, you can still purchase shares of artwork from Banksy with a platform like Masterworks.
With Masterworks, you can purchase fractional shares of blue-chip artwork from artists like Banksy and Monet to diversify your portfolio. Shares often start at only $20, and Masterworks generally holds artwork for three to ten years before selling a painting. Following a sale, shareholders receive distributions.
In March 2022, Masterworks sold a Banksy that it had been holding since October 2019 for $1.5 million, which represented a 32% annualized net return. And according to the company's SEC filings, it currently holds 5 additional Banksy works of art.
Past performance isn’t a guarantee for future results. But if you want to invest in famous artwork from the likes of Banksy, alternative investment platforms like Masterworks make it far more accessible.
Hunt Solnem is an American painter and sculptor born in 1951. Slonem began his career in Manhattan in the 70s, having his first solo show in 1977. His career would largely exist in New York, although his work wasn’t of skylines and bustling cities. Rather, Slonem is known for his paintings of exotic and vibrant butterflies, birds, and other tropical island scenes.
According to Artsy, Slonem’s work has sold for an average of $11,000 per piece and 68% overestimate over the last 36 months. His pieces have ranged from around $1,800 to $32,000, making them more accessible art investment opportunities.
Pablo Picasso is another famous painter from the Modern Art period, largely known for pioneering Cubism and his later surrealist works.
This Spanish artist was born in 1881, and his career is so expansive that art collectors and historians attribute his works to different stylistic periods, like his Blue Period and Rose Periods. He also had tremendous influence on the art world, his development of Cubism being one of many examples.
As for his paintings, a Picasso is obviously immensely valuable. One of his works sold for over $100 million in a Sotheby’s auction, making it the first painting to sell for such a high amount. But you can also find prints, ceramics, drawings, and sculptures from this renowned artist at auctions to this day.
Like Banksy, the easiest way to invest in works from Picasso is to use a fractional art investing platform like Masterworks (which is currently holding Picasso's Homme Assis). But many of his ceramics and sculptures are sold at auction for lower starting bids, so they’re still accessible to investors who want to buy an entire work of art outright.
Loie Hollowell is another American painter that has emerged as one of the best artists to invest in within the last few years. In 2016, Hollowell had her first solo show at the Feuer Mesler gallery. Several of her works sold for $8,000 to $15,000, marking a pivotal moment in the emerging artist’s career.
Since then, prices for those Hollowell have risen by over 1,200 percent. According to Artsy, a Hollowell has an average sale price of $764,000 over the last 36 months, which is 152% over price estimates.
Born in 1983, Lucas Arruda is a Brazilian painter known for his semi-abstract landscapes that often feature beaches and dense forests. He’s also had exhibitions around the world, including London, New York, and Paris, with some of his work being found in the J. Paul Getty Museum and Rubell Museum.
According to Artsy, an Arruda has sold for $278,000 on average over the last 36 months, which is 110% over price estimates. Arruda doesn’t sell many paintings per year, but there is an active secondary marketplace of collectors and auction houses where you can potentially find some of his works.
Henry Taylor is an American artist who was born in 1958. Taylor is most known for his work that depicts African American life in America, and he’s had exhibitions across the world over the course of his career. Like Lucas Arruda, Taylor’s works can also be found in museums like Rubell and the Museum of Contemporary Art in Los Angeles.
According to data from Artsy, the average Taylor sells for about $233,000 over the last 36 months. This is 74% over the estimated price, and recent Taylors have sold for anywhere from around $10,000 to $119,000 in recent auctions.
Risks & Rewards of Artwork Investing
Whether you invest in established modern artists or emerging contemporary ones, it's important to understand that artwork isn’t a guaranteed, profitable investment. However, it is a unique asset class with the potential for outsized returns that can help diversify a portfolio.
If you’re considering investing in art, it’s important to consider some of the major risks and rewards:
- Liquidity: Artwork is typically illiquid, meaning it’s difficult to sell quickly if you need the cash. Platforms like Masterworks have secondary marketplaces for shares that help improve liquidity, but it’s never guaranteed in the art world.
- Lack of Income: Unlike investments like bonds and dividend stocks, artwork doesn’t generate income. This means you need pieces to appreciate – and by a decent margin – to make holding artwork for years a worthwhile investment.
- Volatility: Blue-chip artwork can have stable prices, but prices for emerging artwork can be more volatile. And tastes and the overall art market can change, so it’s difficult, and somewhat subjective, to predict how much a piece might be worth in a few years.
- Potential Returns: According to Masterworks, contemporary artwork has outperformed the S&P 500 and real estate since 1995. This potential for outsized returns is one of the main advantages of investing in alternatives like artwork.
- Diversification: Another benefit of investing in artwork is to diversify your portfolio. This can be done with other alternatives as well, like wine or collectibles, both of which are also becoming more accessible with fractional investing platforms.
- Downside Protection: Historically, artwork prices don’t correlate strongly with other asset classes or the general market. This means art can provide downside protection for a portfolio when markets are down or other asset classes dip.
Should You Invest In Artwork?
According to the Motley Fool, ultra-wealthy investors with a net worth of at least $30 million, alternatives make up at least 50% of total assets. But for everyday investors, alternatives only comprise about 5% of the average portfolio.
In other words, the world’s wealthiest investors are piling into alternatives like artwork, hedge funds, private equity, and cryptocurrency. But does this mean you should do the same?
Ultimately, the answer comes down to your investing goals and risk tolerance. Investing in assets like artwork can help you diversify your portfolio and gain some downside protection. But you also give up liquidity and income generation.
If anything, you can use fractional investing platforms to begin investing in art without having to purchase paintings outright. And there’s nothing wrong with sticking with investments like stocks and ETFs if you don’t want to dabble in alternative investments whatsoever.
I’ve covered six potential artists worth investing in based on historical and recent auction results. But this is only scratching the surface of the number of talented artists out there. And, the art world is ever-changing; who knows what other emerging talent will captivate the world in the coming years?
If you want to regularly invest in art, it pays to keep your ear to the ground. This means attending galleries, following your favorite artists online, and keeping up to date with auction results. As trends change, you’ll hopefully be in a position to capitalize by investing in the right pieces at the right time.