If you keep all of your retirement money in traditional assets like stocks and bonds, you could be leaving tons of money on the table, according to some experts.
A recent study1 out of Goldman Sachs shows investing in alternatives and real assets like private equity, real estate and even art could boost your returns and reduce your risk over the long term. In fact, they advise their clients to allocate up to 30% to these assets.
And they’re not the only major investment firm recommending higher allocations in alternatives.
BlackRock, the world’s largest asset manager with $10 trillion in assets, advises their clients to put up to 20%2 into alternatives.
CalPERS, the California Public Employees’ Retirement System, one of the country's largest pension systems, allocates 30%3 to alternatives.
Yale University’s endowment fund, with $41 billion in assets, invests 60%4 in alternatives.
Plus, according to a survey from global research firm KKR, the top 1% invest an average of 50% into alternative assets.
This exclusive access to alternatives is one of the main reasons the ultra rich have been able to grow their wealth 3x faster than the average investor.
Top investors are bullish on this “alternative” in 2023
According to UBS, some of the most famous investors are bullish on one alternative asset in 2023.
It's not commodities, real estate, or gold. It's a $1.7 trillion asset class – ART.
Larry Fink, the CEO of Blackrock, recently poured tens of millions into art, calling it “one of his favorite stores of international wealth.”
Then there’s the “hedge fund king,” Steve Cohen. He made his billions trading stocks but over the last few years he has amassed an art collection worth over $1 billion dollars.
Ken Griffin, the CEO of Citadel, one of the best performing hedge funds on the planet, invested close to $500 million of his personal money into fine art in just a few months.
This is the type of exclusive access that has allowed the rich to see 3x the performance of average investors.
Now, thanks to Masterworks, everyday investors have a chance to access this exclusive market.
Continued growth during volatile markets
Masterworks has made it their mission to make art more investable.
They use their industry-leading database to find artworks with, what they believe, have high price momentum; then they buy them, store them, and slice them up into shares you can invest in for a fraction of the price it would take to buy the entire painting.
It’s an ingenious strategy and their market timing couldn’t be better as contemporary art prices have outpaced the S&P 500 by more than 2 to 1 since 1995.
Plus, art has the lowest correlation to equities of any alternative asset, according to Citi, which means its value may not decline when the stock market dips.
Masterworks delivered $25.8 million in total net returns in 2022
In the same year, the falling stock market wiped out $9 trillion in wealth; Masterworks was having a banner year.
Every single one of their 9 art sales turned a profit in 2022, netting their investors $25.8 million in total returns.
And they’ve already started off strong in 2023, delivering a 15.4% net return in just 36 days on their latest exit.
Although this kind of return in such a short time might not be typical, they are still adding new paintings every week from artists like Banksy, whose record price at auction* for his works saw an average growth of 67.1% per year over the last 15 years.
Ready to invest like a Billionaire?
Masterworks is unlocking an asset class that was once only available to the ultra rich, and they’re inviting readers to open a free, no-obligation account today.
It only takes seconds to apply for Masterworks and Benzinga readers can skip the waitlist with this invitation.
From there, you can see what artworks are available, and find ones that could fit your financial goals.
*A “record price” reflects the highest hammer price (excluding auction house buyer’s premium) achieved at a public auction for any artwork by a particular artist. The art market considers the progression of record hammer prices to be an indication of an artist’s market momentum and growth rate.
See important disclosures: masterworks.com/cd
Sources
3https://www.calpers.ca.gov/docs/perf-monthly-update.pdf
4https://yaledailynews.com/blog/2022/10/24/yales-endowment-explained/
This post was authored by an external contributor and does not represent Benzinga's opinions and has not been edited for content. This content contains sponsored advertising content and is for informational purposes only and not intended to be investing advice.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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