2022 has been a disappointing year for most assets. Stocks and bonds plunged. Cryptocurrencies crashed. Even traditional safe havens like gold and silver are in the red.
Yet one asset class remains attractive — at least to those who can afford it: fine art.
On Wednesday night, the art collection of late Microsoft co-founder Paul Allen fetched a total of $1.5 billion at Christie’s New York, making it the most valuable private collection of all time.
The auction was record-breaking in many ways.
“Never before have more than two paintings exceeded $100 million in a single sale, but tonight, we saw five,” Max Carter, vice chairman, 20th and 21st-century art at Christie’s, said in a statement.
“Four were masterpieces from the fathers of modernism — Cezanne, Seurat, Van Gogh and Gauguin.”
Per Allen’s wishes, all of the proceeds from the auction will go to philanthropy. Allen passed away in 2018.
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Art as an investment
It’s easy to understand why great works of art tend to appreciate — even during times of economic strife. Supply is limited, and many famous pieces have already been snatched up by museums and collectors.
Art is also a popular way to diversify because it’s a tangible physical asset with little correlation to the stock market. In fact, contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.
According to Deloitte’s latest Art & Finance Report, 85% of wealth managers in 2021 believed art should be included as part of a wealth management service.
Purchasing fine art by the likes of Banksy and Andy Warhol used to be an option only for the ultra-rich. But these days, crowdsourcing platforms let you invest in iconic artworks, too.
Real estate mogul
Fine art wasn’t the only thing in Allen’s portfolio. The tech billionaire also had substantial real estate holdings.
In July, it was reported that Allen’s estate sold two apartments in New York City for $101 million. Later that month, his estate sold eight properties on Lake Washington’s Mercer Island for $67 million.
Real estate has been a popular asset class as of late — perhaps because it’s a well-known hedge against inflation.
As the price of raw materials and labor goes up, new properties are more expensive to build. And that drives up the price of existing real estate.
Well-chosen properties can provide more than just price appreciation. Investors also get to earn a steady stream of rental income.
Of course, while we all like the idea of collecting passive income, being a landlord does come with its hassles, like fixing leaky faucets and dealing with difficult tenants.
But you don’t need to be a landlord to start investing in real estate. There are plenty of real estate investment trusts (REITs) as well as crowdfunding platforms that can get you started on becoming a real estate mogul.
Gates has been hoarding this
Allen co-founded Microsoft with his childhood friend Bill Gates. According to Forbes, Gates is currently the sixth richest person in the world with a net worth of $103.8 billion.
As you’d expect, Gates also has an art collection and a real estate portfolio. What’s more intriguing, though, is that he’s also been hoarding farmland.
Earlier this year, it was reported that Gates has amassed nearly 270,000 acres of farmland across dozens of states. That makes him the largest private owner of farmland in America.
You don’t need an MBA to see the appeal of farmland: markets can go up or down, but no matter what happens, people still need to eat.
That makes farmland intrinsically valuable.
Of course, not everyone is interested in farming. But you can invest in farmland without getting your hands dirty.
All-in-one investment platforms that allow you to invest in farmland directly by taking a stake in a farm of your choice. You’ll earn cash income from the leasing fees and crop sales — and any long-term appreciation on top of that.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: https://finance.yahoo.com/news/paul-allens-fine-art-collection-140000886.html