Art can be an excellent alternative investment, but few retail investors have the liquid assets to buy works from blue-chip artists like Banksy, Gerhard Richter, and Pierre Soulages. Masterworks.io offers an alternative way to invest in art, setting up purchases as LLCs and allowing members to buy shares for as little as $20.

Why a Secondary Market?

Of course, art is a long-term investment, and the Masterworks team is very upfront about their goal to sell paintings at the best price after about three to ten years. That is why they developed the secondary market (currently available only to U.S. investors). If you need to get out of your position before the artwork sells, or if you want to try and capitalize on a hot painting by selling your shares at a premium, you can do so.

A Welcome Update for Both Buyers and Sellers

The tough thing about the secondary market was never knowing how to price an artwork if you wanted to sell it rapidly. Buyers could make a counteroffer, but clearly liquidity was an issue. Now, Buy Offers are allowed in the secondary market. This will enable buyers to make an offer of what they are willing to pay. Sellers can choose to fill those offers at will, providing yet another way to liquify your assets before the paintings sell.

As you can see, this new feature is beneficial for both buyers and sellers and should help serious investors to be able to buy or sell shares in a simplified manner.

Is Masterworks Right for You?

Keep in mind that Masterworks requires an interview to join, and the expectation is that you will invest hundreds or perhaps even thousands of dollars to get started (albeit, they will immediately wave the $10k initial investment for most retail investors). However, once you have invested in an initial offering (at the time of this writing, there are three artworks available), you can buy and sell on the secondary market in much smaller increments. Any painting that is 90 days past its IPO is available for the secondary market.  

There is currently no referral program at Masterworks, so I won’t be compensated when you follow the links. This is just an informational piece for anyone looking for an alternative investment. Feel free to tip yourself generously below, follow my blog to see my latest posts, and head on over to Masterworks to learn more about investing in art.