ARTSPLIT: Why You Should Invest in Art in 2023
2022 was a challenging year for risky assets such as equities, commodities, and cryptocurrencies, especially in developed economies. This was many as a result of contractionary monetary policies in the form of interest rate hikes, an initiative policymakers took up in an attempt to slow down the increase in the inflation rate that plagued the entire world.
The interest rate increase caused the borrowing cost to be more expensive. Because of this, investors reacted by fleeing away from risky assets and more towards “safe assets,” such as bonds and treasury bills. As a result, these assets saw their return-on-investment increase despite the challenging economic climate.
While 2023 has started strong for riskier assets, it is essential to know that the Art scene in 2022 was strong, as there has historically been an inverse relationship between interest rates and art valuations. Despite major macro shifts since early 2022, Art collectors continued to acquire Art despite more significant economic concerns. Collectors still participated and competed for high-quality works, especially as Art remains one of the most attractive hedges against inflation and an essential component of a broader portfolio diversification strategy.
That being said, let’s look at why you should invest in Art in the new year;
A reliable long-term investment
One of the main reasons why Art is a good investment is because it is known to hold its value over time. Unlike stocks or other riskier assets, Art does not tend to go up and down in value based on market fluctuations, as we saw in 2020 and 2022. This was especially true during the 2020 pandemic, where other markets fluctuated significantly while the art market remained stable in 2022. The changes were not felt because the value of investment-grade Art is independent of most external events and tends to increase steadily as the years go by.
Support Artists and their Craft
An investment in Art allows buyers to support artists, both upcoming and already established, all over the world. Aside from this, you also support their ideologies and perspective of life that they have translated into these beautiful art pieces. Artworks, sometimes, are not just pretty pictures or intriguing sculptures with which to decorate your home, but they may also have a message that resonates with your worldview. Beyond this, buying paintings also help support artist and ensures the continuity of the industry as a whole.
Hedge Against Interest Rate Hikes and the Possibility of Recession
Art as an investment can be used to hedge against the effects of interest rate hikes like we saw in 2022, where riskier assets lost a significant portion of their value as investors ran towards haven assets like precious metals, which at the end of the day, did little to nothing to safeguard wealth. However, Art has proven over several periods of interest rate hikes, high inflationary environment, and even periods of recession to be the ultimate hedge against tumbling economic conditions. No matter the economic situation, Art has stood to the test of time and seen its value only appreciate further.
Conclusion
If you know what you’re doing, purchasing a piece of Art is the best financial move in 2023. Some of the world’s most famous painters have seen their works fetch millions of pounds at auction, and with ARTSPLIT, you do not require a large sum of money to participate.
The key to a successful art investment is purchasing works by reputable artists at reasonable times, which ARTSPLIT regularly provides through its platform. It’s crucial to do your homework before dropping serious cash on Art, so it’s worth your time to stay abreast of the industry and learn how it might benefit your portfolio. There is uncertainty with any investment, but armed with knowledge, the road ahead can be smoother.
Spending money on Art has numerous positive outcomes. Owning a work of Art provides investors with the satisfaction of having a tangible asset with lasting worth, as opposed to the volatility of many other investment alternatives.
ARTSPLIT is an art trading technology company driven by one common goal; enhancing the investment status of African art by allowing users to co-own rare and valuable artworks on a platform that guarantees price discovery and market liquidity.
To learn more about the platform, send an email at info@artsplit.com or visit www.artsplit.com. You can also call or WhatsApp our mobile at +234(0)9088962169 and follow @artsplitofficial on Twitter, Instagram, and Facebook.
