In 2021, the global art market reached $65.1 billion. Volume of sales increased following COVID, and online sales of art and antiques also played a role, contributing one-fifth of the total art market value.
In other words, artwork is a massive, growing global market. But when we think about investing in art, what probably comes to mind first is investing in works from famous names like Banksy, Picasso, and Warhol.
However, emerging artists also present a potentially lucrative opportunity for investors. And you don’t need as much money to begin investing as you would with established artists.
In partnership with Masterworks, we’re exploring the world of emerging artwork and how you can find upcoming artists to invest in.
Emerging Art vs. Established Art – What’s the Difference?
People purchase artwork for a variety of reasons. For some, artwork is purely hedonistic, providing a way to decorate a home or transform a space. For others, artwork is an alternative asset that’s purchased to diversify a portfolio.
Whatever the case, when it comes to investing in art, there are two general markets to consider:
- Emerging Art: Artists who are still developing their name and reputation in the art world are emerging artists. These artists have a portfolio, but they’re still working to hone their craft and to work with galleries, collectors, and exhibitions to promote their artwork more widely.
- Established Art: This market is composed of artists who are already recognized by the art community and its patrons. These established artists generally have a large number of pieces, many of which have already been sold before in auction houses or at galleries. And, their works are more expensive than emerging artists due to higher demand and previous track record.
As an investment, emerging art is generally much less expensive than established art. This is because emerging artists are somewhat unproven, so it’s difficult to know how their works might appreciate or fare in the market.
But the trade-off is that it’s easier for investors to get in on the action. And if an emerging artist becomes more established and popular, early investors can see potentially massive gains as the demand for early original works increase.
How to Invest in Emerging Art
Because emerging artists have less work and recognition than established artists, it can be more difficult to find their work and to invest in them versus established artwork.
However, there are several strategies and resources you can use if you want to add emerging artwork to your portfolio.
1. Attend Art Galleries
One straightforward method to invest in emerging art is to attend local galleries or art exhibitions to look for new artists on the scene.
Smaller galleries can often focus on one or two emerging artists, or an overall theme for an upcoming exhibition. This makes them an excellent and inexpensive way to discover local talent from artists who are beginning to find early success.
You can also attend larger, national galleries or even online art galleries to begin your search. The Artling is one popular option. You can also find more niche online galleries like S&P Gallery that feature work from both established and emerging artists.
2. Work with Private Art Dealers
Working with private art dealers is another way to invest in emerging art. These dealers help connect artists and investors, acting as a middleman between the two parties. And if you’re looking for a certain type of style, a dealer might have a list of emerging artists in mind that match what you’re looking for.
You can find artwork dealers at galleries or even art reviews and exhibitions. And some online and in-person galleries also have art dealers you can work with for a more white-glove service.
3. Attend Art Auction Houses
Like attending galleries, visiting art auctions is another way to scout out emerging artists that are beginning to find traction in the overall market.
However, auction houses like AucArt specialize in emerging artists. You can view existing pieces and emerging artists on the platform to find your next investment. And AucArt also has a mailing list you can join to receive updates when new pieces become available.
4. Use Social Media
One final option for investing in emerging art is to simply find upcoming artists on social media.
These days, many artists use platforms like Instagram, Twitter, and other social media sites to showcase their work. Therefore, following these artists where they share their latest content is an easy way to stay informed about the current market and some potential investments.
Following emerging artists on their personal pages can also help you learn more about their life, past works, and what plans they have for upcoming pieces or galleries.
Bonus: An Alternative Investing Solution — Fractional Shares
Emerging artwork has the potential for outsized returns if an artist gains more popularity. And it’s also an appealing market since you don’t need as much capital to invest as you do with established artwork.
However, this doesn’t mean more established, contemporary artwork is off limits. Thanks to the rise of alternative investment platforms, you can actually invest in shares of these valuable pieces, diversifying your portfolio without needing millions of dollars.
Masterworks is the leader in the fractional artwork investing space and it specializes in blue-chip artwork from artists like Monet, Banksy, and Picasso. The company purchases high-value contemporary artwork that it believes has significant appreciation potential. From there, it securitizes artwork so investors can purchase shares.
Shares start at just $20, and Masterworks typically holds pieces for three to ten years. Following a sale, investors receive distributions. And there’s even a secondary marketplace where you can buy and sell shares to help improve liquidity.
According to analysts, contemporary artwork has seen 13.8% average annualized price appreciation since 1995, outperforming both the S&P 500 and real estate.
Masterworks has handed members +21%, +27%, and +32% net returns from some of their past offerings.* Past performance doesn’t guarantee future results, but numbers like that are impressive.
Ultimately, if you want to invest in emerging art and more established works, using a platform like Masterworks helps remove the barriers to entry. You can join 575,000 other members in a few clicks.
Is Artwork Investing Right for You?
Artwork has the potential to outperform the market. And if you want to diversify your portfolio with a fairly uncorrelated asset to the general market, multimillion-dollar art can be a great choice.
That said, art investing is speculative and riskier than many other asset classes. Liquidity is also a concern. If you buy emerging art, there’s no guarantee you’ll be able to resell it quickly if you need the cash. Plus, some investors shy away from artwork since it doesn’t generate fixed-income like you get with dividend stocks or real estate.
Ultimately, you have to outline your risk tolerance, investing goals, and then decide how artwork fits into the equation. It can be a useful asset class for investors looking for diversification. But there’s no guarantee of returns, and you should never invest money in artwork you can’t afford to lose or lock-up for the long-term.
*“Net Return” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the date the sale is consummated. IRR may not be indicative of Masterworks paintings not yet sold and past performance is not indicative of future results.