Investing In Art To Diversify Your Asset Portfolio

“Art is unquestionably one of the purest and highest elements in human happiness. It trains the mind through the eye, and the eye through the mind. As the sun colors flowers, so does art color life.” - John Lubbock, The Pleasures of Life

Long regarded as a luxury only available to the wealthy or avid collectors, art is often passed over as an unnecessary expense. When we think of art, we think of museums, grandeur, elegance -- concepts that we might not think apply to our own lives and homes. In dismissing fine art as unattainable, we lose sight of one of the purest forms of human happiness; the joy brought to us by owning and appreciating a fine piece of art and the every-day elegance it can bring to our lives.

Art doesn’t have to be “just for pleasure” -- though, that’s certainly a benefit. No, art can also be a long term investment and a strategic way to diversify your portfolio of assets. While your art appreciates value, it is also serving the important function of beautifying your space and enriching your life. Today, art investment and ownership is no longer exclusive to eccentric collectors and connoisseurs of fine art. Instead, investing in art is becoming a mainstream strategy for expanding your portfolio through a collection of work that speaks not only to your eye and your mind, but to your assets, as well.

Heavens Gate

"Heaven's Gate" a Fine Art Limited Edition of 100 by world renowned nature photographer Aaron Reed.

The Art Market

Art is resilient. Throughout history, humans have gone to great lengths to ensure art survives war, turmoil, travel, and change. Art has long been a symbol of humanity’s resilience and the fine art market reflects this. If we look at the financial recession in 2008, we see that while the financial markets plummeted, the art market reached new heights.

During the recession, the demand for masterpieces shot to $2.2 billion. Despite one of the largest financial downturns in history, money continued to flow into fine art. By 2015, the masterpiece art market swelled to $4.2 billion (twice it’s 2008 value). Since then and throughout the last few years, art has remained a growing investment -- or at least a consistently stable one. By 2018, the Wall Street Journal declared art to be the best investment class of the year, despite it being an incredibly difficult year all around, with declines across the board, including the gold market.

It’s comforting, then, to see that as markets rise and fall, art rarely takes a dramatic hit the way that stocks do. Fine art is in a league of its own when it comes to market performance; it is both safe and lucrative.

On Earth, As It Is In Heaven

"On Earth, As It Is In Heaven", a Fine Art Limited Edition of 100 by artist Aaron Reed.

Investing Wisely

One of the best ways to enhance your portfolio is by dedicating 10% to 20% of it to fine art. Limited edition art like photography or fine art prints can bolster your assets while also serving as a unique way to decorate and define your home or office space. Several factors determine the value of fine art, including the number of prints available, the significance of the work, the quality of the print, and whether it is signed and numbered by the artist.

In the same way that posters have become a way to mass produce artwork as an affordable option for households everywhere, a fine art print is more valuable when it is rare. A limited edition print is more valuable than a mass marketed edition, giving you the unique opportunity to seek out artists you love who offer the one-of-a-kind work that only gains value as time passes.

Limited edition art is valuable because it is just that: limited. The fewer people who own a specific piece, the more valuable it is and the more prestigious your ownership. Fine art nature photographer Aaron Reed limits his work to 50-200 total pieces. A piece that has reached its production limit will be retired, never produced again as a fine art print. Each piece from his collection is signed and numbered and includes a matching Certificate of Authenticity provided as additional provenance.

Shirley Temple

"Shirley Temple" a Fine Art Limited Edition of 50 by Aaron Reed.

Modern Day Artists

Purchasing fine art prints can have a variety of benefits, especially if you are investing in up-and-coming artists whose work will be worth more as their career advances. You are not only investing, but spending your money on something that brings class, prestige, and beauty to your life and space in a way other investments cannot. Simply put, you can’t hang stocks on your wall. Enjoying your investment while it appreciates is one of the top advantages of wall art. Unlike other items for your home like appliances or furniture, art you love won’t wear out over time and neither will your appreciation of it if you take the time to seek out the right piece for you. Art is an investment you can see and enjoy, increasing not only its monetary value, but your overall quality of life as the person who gets to look at it every day.

Making a Profit

While all art is a worthy investment, not every piece will automatically accrue value in the way you might hope. Diversify your investments by making a selection of the most promising and talented artists and monitoring their progress. This will allow you to divide your investments among artists, based on how promising they seem to be. This also gives you full freedom to cultivate a portfolio you are truly passionate about -- a diverse mix of the artists you love the most and whose work you would most value seeing in your home.

The Rise

"The Rise" a Fine Art Limited Edition of 50 by nature photographer Aaron Reed

While we all share the same dream about stumbling across work from one of the Masters at an estate sale you don't need to uncover a long-lost Leonardo da Vinci painting to make a profit on art. While any investment can be a gamble, purchasing fine art can also be extremely lucrative. In 2015, “Interchange” by abstract artist Willem De Kooning was sold for $300 million after originally being purchased for only $4,000 in 1955. Similarly, Jim Crow (1986) sold for over 125 times the original investment after the buyer held onto it for 25 years. While sales like these are rare, careful research and diligent planning can pay off in the right hands. Before you know it, a piece you’ve cherished for more than 20 years might become the item that finances your well-earned retirement. There’s something simple and poetic about passing art from one set of hands to the next, allowing the piece to touch us briefly and then move on to the next owner. Still, the high value of art means that the piece leaves its previous owner not only with a lasting impression, but a lasting gift.

Understanding Your Investment

Art investment is its own artform. Much like creating a piece of art, investing in art isn’t a quick and easy process. It takes years of practice and careful research to make wise decisions and years longer for your investment to appreciate. But, it’s worth it. While art collection might feel like a hobby reserved for enthusiasts, a fine piece of art brings grace and beauty to any space. To forge a connection with an artwork is a precious and valuable thing on its own. You’re investing not only in the value of the piece, but its history, the story of its artist, and its impact on our artistic culture. If your investment pays off in the long run, it is simply an added bonus to the years of joy you can experience from owning a precious photograph or a one-of-a-kind piece of art.

Aaron Reed Luxury Fine Art

To learn more about fine art nature photography or to inquire about the work showcased in this article, to begin your own journey into the world of investing in art, please have a look at the online galleries from Aaron Reed and have a look at his current collectors have to say in their own words.

LiveWire

"LiveWire" a Fine Art Limited Edition of 50 by artist Aaron Reed.