According to the Motley Fool, diversifying your investments isn’t just about balancing your portfolio between stocks and bonds. Alternative assets such as fine art might have a place in your portfolio. [1]Investing in art has several advantages over other luxury collection investments.
Fine art is a physical asset. Physical assets include real estate, jewelry, precious metals, antique cars, rare vintages of wine or whiskey, and of course fine art. These assets are often a plus for investors because the investor has more control over the asset. Physical assets also have a concrete material value. Thus, they are independent of monetary values and offer protection against asset loss in the event of inflation.
Fine Art vs Other Physical Assets
Fine art is a physical asset that can be enjoyed without diminishing its value. Unlike rare vintages of wines or whiskeys which are used up when enjoyed, or an antique car which accumulates wear and tear and diminishes in value when used, Fine art can be displayed and enjoyed without depreciation. However, fine art is more limited than real estate and precious metals regarding the ease of selling.
Bronze Sculpture vs Other Fine Art
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In the category of Fine Art, bronze sculpture is one of the most resilient forms of art. Unlike paintings, glass, or pottery sculptures, bronze can be displayed outdoors. With regular cleaning and a simple wax coating, bronze sculpture can remain in beautiful condition for centuries. Bronze sculpture is also more resilient in the case of a house fire. The typical house fire ranges from around 600 degrees Fahrenheit to 1,500 degrees. The melting point of silicon bronze (a common alloy used in bronze sculpture) is around 1,880 degrees. The flash point of an oil painting is around 550 degrees.
Investing in Art
Fine art represents a means of diversifying your assets that is not highly correlated with the stock or bond markets. Fine art can serve as a good hedge against inflation. However, it should also be considered more of a long-term investment comparable to bonds. If you are planning on fine art investing make sure to do your research.
[1]Levy, Adam – Investing in Art Stocks, April 5, 2024- https://www.fool.com/investing/stock-market/market-sectors/communication/media-stocks/art-investment/