How Art Investing Went Mainstream from Rockefeller to Retail

Between a wave of new tariff proposals, AI competition from China (i.e. DeepSeek), and tech’s dominance in the S&P 500, some experts are predicting a potential rise in stock market volatility. Especially when combined with the top-heaviness of the S&P, which is at a historical peak thanks in part to the “Magnificent Seven.” Perhaps as a result, alternative assets are gaining more traction, including the 66,000+ investors using Masterworks’ art investing platform to diversify into an exclusive alternative asset class that’s already outpaced the S&P for the last 30 years (1995-2024), according to a Masterworks analysis.

Even prior to 2025’s market-shaking events, BlackRock (BLK), Vanguard, Goldman Sachs (GS) and JPMorgan Asset Management (JPM) all predicted the stock market will fall short of its recent 9% annual return, and Warren Buffett’s Berkshire Hathaway (BRK.B) is holding approximately $325 billion in cash—more than any point in its history. 

However, many experts suggest that diversifying not just among a variety of stocks, but diversifying a portion of a portfolio into different asset classes could provide a counterbalance—a sentiment JP Morgan Asset Management just stressed in their 2025 outlook. Remarking on the increased democratization of alternative assets for both institutions and individuals, JP Morgan writes that the usual stock/bond “60/40” portfolio may be enhanced into one that also includes these alternative assets: a “50/30/20” portfolio.

Examining the field of alternative assets, one asset class has several interesting characteristics for diversification: fine art and collectibles. White the JP Morgan Asset Management outlook didn’t cite art specifically, a 2023 Deloitte study estimated ultra-high-net-worth individuals held over $2.1 trillion dollars in art and collectibles wealth, while predicting that number to exceed $2.8 trillion by 2026. At that point, this category could make up over 10% of the portfolios of these ultra-high-net-worth individuals. In addition, a 2022 study from Citi and Masterworks shows the diversifying potential of art, thanks to its low (or nearing negative) correlation to most major asset classes.

This art investment field has grown since the days of Rockefeller and JP Morgan, the original financier collectors, with a 2024 Bank of America survey of wealthy individuals revealing something notable: 83% of HNW respondents 43 and younger say they currently own art for investment purposes, or would like to. The reason cited? After weathering multiple recessions, newer generations say they want to diversify beyond just stocks and bonds. 

This sentiment appears again in a 2023/24 UBS survey of high-net-worth individuals, which found +85% of respondents reported confidence in fine art as an asset class. Additionally, an equal share agreed art can act as a useful portfolio diversifier for a portion of their strategy, with more than 90% believing it experienced either neutral or positive effects in periods of inflation, high interest rates, and volatility in other markets.

Nowadays, not all players in the blue-chip art investing space are billionaires; Masterworks’ art investing platform has opened the asset class to all types of investors, without requiring millions of dollars or art expertise. Masterworks has over $1bn+ capital raised across 450+ works, acting as a one-stop-shop for art investing. Since its founding, Masterworks investors have realized annualized net returns like +17.6%, +17.8% and +21.5% (among assets held 1+ year, not including unsold), distributing back a total of over $60 million dollars, including principal, in investor proceeds across their 23 exits. For those interested in diversifying a slice of their portfolio into alternative assets, Masterworks’ website contains more information and background on their process.

ARTICLE DISCLOSURES: 

At the time of publication the writer did not have a position in any of the securities mentioned in this article.

This is not an offer of a security or investment advice.

See important disclosures at masterworks.com/cd.

Past performance is not indicative of future returns. View all past offerings here.

Contemporary Art vs S&P Data and Art Correlation Data based on repeat-sales index of historical Post-War & Contemporary Art market prices and S&P 500 annualized return (includes dividends reinvested) from 1995 to 2024, developed by Masterworks. There are significant limitations to comparative asset class data. Indices are unmanaged and a Masterworks investor cannot invest directly in an index.

Amount ‘distributed back’ represents the total liquidation proceeds distributed back to investors, net of all fees, expenses and proceeds reinvested in Masterworks offerings, of all works Masterworks has exited to date.  This metric is not considered a presentation of performance but rather a mathematical figure that displays a platform metric on size, scale, and operation of the platform.

“Annualized net return” refers to the annualized internal rate of return net of all fees and expenses, calculated from the offering closing date to the date the sale is consummated. IRR may not be indicative of Masterworks paintings not yet sold and past performance is not indicative of future results. For additional information regarding the calculation of IRR for a particular investment in an artwork that has been sold, a reconciliation will be filed as an exhibit to Form 1-U and will be available on the SEC’s website.

Art sales price data is comparative only. Each painting is unique and historical data is not a direct proxy for any specific painting or investment.  Data represents whole art not an investment into our offerings which includes fees and expenses.  Past sales are not indicative of future results.

This communication is sent exclusively from Masterworks and is not endorsed by or affiliated with JP Morgan, Citi, UBS, Bank of America, BlackRock, Vanguard, Goldman Sachs or Deloitte.  While Masterworks contributed to the Citi publication, it did not contribute to the creation of the referenced content from JP Morgan or Deloitte. The report is not intended to be regarded as investment advice, an offer, or solicitation of an offer to enter into any Masterworks offering.