Masterworks Review: Is It Worth Buying Art as an Investment?

Customer is looking to buy a new frame for her painting

Diving into the art market can be daunting. However, Masterworks offers an intriguing avenue for investment. Our Masterworks review will guide you through the ins and outs, and hopefully, answer your burning questions.

What Is Masterworks?

Scott Lynn started the company Masterworks in 2017 when he saw the value of his art collection and wanted to make art investments available for all types of investors.

Masterworks stands out as an innovative alternative investing platform, specifically designed for art enthusiasts and investors alike. Historically, the world of art investment was reserved for the elite and affluent, often requiring significant amounts of capital. But Masterworks has completely transformed this realm by democratizing access to high-end art pieces.

Instead of needing millions to buy an entire painting, Masterworks offers the chance to purchase shares in these artworks. This unique model works similarly to buying shares in a company through the stock market. But in this case, you’re investing in tangible pieces of art, such as a Picasso or a Warhol.

Masterworks identifies contemporary artists whose works exhibit attractive investment characteristics.  This is done using data analytics built on top of its proprietary database. The database is comprehensive to understand the appreciation rate for each artist and also provides a preview of artworks, purchase price, sales price and the appreciation rate. It has an acquisitions team, a group with decades of art market transaction and diligence experience, which acquires the artworks.  Only 3% of the offered artworks pass the due diligence process.

The artwork is securitized allowing the public to invest. The firm uses a buy-and-hold approach, selling at an opportune time for maximum returns. The period could range between 3-10 years. It has a dedicated sales team with a private gallery, which sells the artworks to top collectors directly. The investors can also sell their shares on the trading market.

Masterworks has purchased over $200 million of fine art since its inception. It has a valuation of over $1 billion.

Masterworks Features and Offerings

  • User-Friendly Experience: Masterworks offers a user-friendly experience, ensuring that even those not technologically savvy can navigate the platform and make their desired investments.
  • Research Capabilities: The Masterworks platform offers valuable research on artworks and the contemporary art market. It curates the artworks, allowing beginners to invest even if they have no prior connection or knowledge of the art world.
  • Complete Investment Management: The app offers tools that allow investors to monitor their investments, manage their portfolios, and make informed decisions based on real-time data.
  • Active Trading: Masterworks is particularly suitable for active traders. This accessibility amplifies their ability to respond swiftly to market movements, optimizing their investment strategy.

Expected Return Investing With Masterworks

The Masterworks official site indicates an upfront investment requirement of $15,000, which can be discussed based on the investment profile of the subscriber. Furthermore, one can incorporate shares of artwork into an investment basket at a rate of $20 per share.

Historically, artwork has better returns than other types of investments, including stocks and bonds. Over the last 26 years, art investments averaged a 14.1% annual return. During the same period, the S&P 500 had a 9.9% annual return.

However, as with any investment, it’s essential to be aware of the costs involved. Masterworks charge an annual management fee of 1.5%. Additionally, they take a 20% cut from any profits realized from an artwork’s sale. It’s always crucial for potential investors to factor in these fees and understand the platform’s terms and conditions before committing their funds.

MasterWorks: What Does Trustpilot Say?

Masterworks has received generally positive reviews on Trustpilot, a 4.3 out of 5 “Great” score. The platform is praised for its efficiency, informative advisors, and customer service. One review that is emblematic of the sentiment pointed out the positive service behind the platform:

“My wife and I found out about Masterworks in an article published by the New York Times. We were definitely intrigued and decided to contact the company for more information about investment opportunities in fine art…We decided to become investors and are excited to add artwork to our portfolio.”

Some negative reviews pointed out that there were not much of a variety of offerings to invest in, but in 2023, Masterworks has been working hard to rapidly improve its selection.

Masterworks Review: Final Thoughts

Wrapping up this Masterworks review, it is clear that this innovative company has undeniably bridged a gap, granting many the chance to delve into the intricate realm of art investment. This democratization of the art world is commendable; nonetheless, it is crucial to recognize the innate risks that accompany art investment. The art market, much like other markets, can be unpredictable and influenced by myriad factors. It is important to note that your investment will gain as contemporary art prices increase. You will realize these gains only when you sell your shares or Masterworks sells the art piece that you have invested in.

As potential investors, it’s paramount to diversify your knowledge and understanding. This means delving deep into what competitor platforms and the best alternative investments such as FarmTogether and YieldStreet have to offer, comparing, contrasting, and analyzing to identify the most suitable platform for your needs.

If you’re keen to learn more about what Masterworks has to offer, click here to embark on your journey.

Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.

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