Masterworks Review for 2024

If you want a diversified portfolio, you need more than just stocks and bonds. One increasingly popular way investors are diversifying their portfolio is with fine art— more specifically, lucrative blue-chip art investments. 

We know what you are thinking. Purchasing your own Picasso is not a small feat; it’s expensive, illiquid, and requires special storage and maintenance. But what if we told you there’s a way to buy fractional shares of contemporary artwork by some of the world’s most famous artists. 

This is what Masterworks.io excels at. It’s a community of more than 450,000 art investors with exclusive access to art investments. If you are interested in investing in art for art’s sake or diversifying your portfolio, here is why it pays to know this platform.

Masterworks Overview

Masterworks.io is an online art investment platform that allows users to buy shares of some of the world's most iconic and valuable works of fine art. Also known as blue-chip art, the pieces available at Masterworks include highly sought-after paintings that are highly likely to gain in value over time. 

Typically, you can blue-chip artworks like these exhibited in major museums or sold at prestigious auction houses. Some of the most famous artists include Pablo Picasso, Vincent van Gogh, and Andy Warhol.

The art investment platform buys the painting itself then securitizes it by registering it with the SEC. Once Masterworks does that, you can buy shares of that painting. 

Thanks to Masterworks, you can invest in multimillion-dollar art and potentially see a sizable return on your investment without having to buy the entire painting.

Some of the key features of Masterworks.io include a user-friendly interface, secure storage for paintings, and access to expert art advisors.

Who Is Masterworks for?

Masterworks is an excellent platform for anyone looking to diversify their portfolio. If you’re just an art-lover and interested in owning a piece of a Picasso, Masterworks is perfect for you. 

There’s also long-term potential for significant profit, which is tempting even for those with no interest in art. While today’s art profiteers often rely on a range of NFT marketplaces to buy and sell digital art, investing in actual paintings without purchasing them can also be a lucrative opportunity. 

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 of time, the S&P 500 had a 9.9% annual return.

In addition to diversifying your portfolio, the value of the artwork won’t be affected by the ups and downs of the stock market, which isn’t really correlated with the art market.

How Does Masterworks Work?

Masterworks is an investing platform for purchasing contemporary art. Its team evaluates the artwork, and experts choose pieces they believe will grow in value. They’ve analyzed millions of data points to determine which paintings will increase in price the fastest. 

Once the art is bought, Masterworks registers it with the Securities and Exchange Commission or SEC. It allows them to sell shares of the artwork to the investors through the platform. Since the art is registered with the SEC, both accredited investors and retail investors can participate in their offerings. 

Shares of the piece are then sold for 90 days from the SEC approval as a primary offering. You can then purchase shares on Masterworks and there is no investment minimum or minimum amount of shares you need to buy. 

It can take some time for Masterworks to sell a piece. They may keep artwork in storage for a few years or more because there wasn’t an opportunity to sell it at the right price. 

After the sale, Masterworks distributes all proceeds to the investors who purchased shares. Since 2019, Masterworks has sold four paintings each giving their members over 30% net return.

Investors who are not willing to wait for the art to be resold can sell their shares on a secondary market, which is also available on the platform. This allows users to trade shares with fellow members. However, the platform doesn’t guarantee that there will be buyers or sellers for the art you may wish to purchase or sell. 

Additionally, the prices on the secondary market aren’t fixed - it depends on the demand for particular shares. The secondary market is only available to U.S. citizens with U.S.-based bank accounts. 

Masterworks App Features

The Masterworks platform comes with several excellent features that simplify the process of investing in art. 

Excellent Art Research Available to Investors

Masterworks currently employs more than 150 people, many of whom are seasoned art experts. These people evaluate and research artists and their work to find art pieces that have the potential to grow in value over time. Investors themselves have access to this research to help them choose which piece they want to invest in. 

The Superb Platform Design 

The Masterworks investing platform has a simple design that makes it easy to navigate. A database containing the prices of thousands of pieces and other resources is easily accessible. Buying and selling shares is also straightforward. 

Furthermore, Masterworks has an excellent mobile app for iOS. The iOS app is praised for its excellent user interface that allows you to track and purchase shares effortlessly. Unfortunately, there is no Android app just yet. 

Accessible to Different Types of Investors

Until recently, investing in art was a privilege reserved for the ultrarich. These types of investments required large sums of money, including funds for storage and maintenance. 

With the Masterworks art investing platform, you don’t have to be a billionaire to invest in art. The platform makes investing in art accessible to different kinds of investors and for a much smaller amount of money. Whatsmore, you don’t have to be an accredited investor or even a high net individual to use the services. 

Excellent Customer Support 

As with any other decent investment platform, Masterworks pays special attention to the quality of its customer support. You can reach the support team via phone or email. 

The initial point of contact is a Masterworks membership interview, where you’ll be able to connect with experts and discuss your goals and risk tolerance. You will also get expert advice to help you pick the appropriate pieces of art to add to your portfolio. 

Things to Be Mindful of When Investing Through Masterworks

Even though Masterworks offers excellent investment opportunities, there are a few potential pitfalls.

There are No Guarantees 

Unlike when you purchase bonds for your portfolio, artwork doesn’t promise regular returns. Instead, you have to wait for the piece to be sold for a higher price down the road. Unfortunately, Masterworks warns that they cannot guarantee you’ll make a good return on your investment, since past performance doesn’t guarantee future results.

Nevertheless, investors unhappy with their purchase can cash out early if they want, as Masterworks provides a secondary market on its platform. Of course, to sell your investment, you have to find an investor willing to buy it, which is also not always guaranteed.  

Not-So Managed Portfolio for a Management Fee

The annual management fee on the Masterworks platform is high. Moreover, investors are paying solely for the research and assistance in selecting investment products. There’s a team that guides you in the investing process, but you are the ones who ultimately designs your portfolios.

Compared with robo-advisors that drastically simplify portfolio creation for investors, this business model might be challenging for some. However, if you don’t mind taking the time to get better informed, you won’t have trouble navigating the platform. 

How Much Does Investing Through Masterworks Cost?

The financials behind Masterworks are pretty straightforward, but the actual pricing will depend on the price of the art you are purchasing. No investor can purchase more than 10% of the shares of one art piece. 

Masterworks currently charges two different Masterworks fees for using its services. Investors pay an annual management fee of 1.5%. 

If the art increases in value and is sold on the open market, the platform keeps 20% of the profits. But still even after their fees, their investors have still gotten 30% net returns from their sales. 

How to Become a Masterworks Investor

Part of the application process involves requesting an invitation to join the platform, which requires you to call and consult with Masterworks advisors. The interview typically doesn’t last longer than 30 minutes, and the overall consensus among investors is that it’s incredibly helpful for getting familiar with the platform.

Conclusion

Masterworks.io is a legitimate investment platform that offers members access to unique and exciting investment opportunities. This is a unique way to invest in art and diversify one's investment portfolio.

However, this investment is not without its share of risks. Your returns aren’t guaranteed unless. Of course, with greater risks come greater rewards. 

Even though Masterworks art is thoroughly vetted by experts, you should never invest more than you can afford to lose.