Buying art can reflect investors’ personal taste – showing passion for different interests and gaining the prestige of owning a rarity. Amid stock markets reaching record highs, some investors are putting dollars toward a high-end alternative that can combine the prospect of long-term value and a nod to history. The global art market created $65 billion in sales in 2023, across 39.4 million transactions.¹

Luxury draws top dollar, with the value of art and collectibles owned by the world’s wealthiest people totaling close to $2.2 trillion in 2022.²

Some billionaires count themselves among this collector crowd. Amazon founder Jeff Bezos once paid $53 million for a single piece, and Microsoft’s Bill Gates has amassed a collection of art and artifacts valued around $127 million.³

The art market has been seeing growth in lower-priced purchases. In 2023, 85% of sales in online-only auctions came from pieces sold for under $250,000.¹

Look of luxe

See how those stack up against the most expensive paintings ever sold:

Art’s biggest buys

Source: Veranda.com, as of February 2024.⁴

Auction houses around the world act as gatekeepers, providing both security for and sales of high-end pieces. New York-based Sotheby’s saw $7.9 billion in sales in 2023;⁵ among them was a Pablo Picasso work that sold for $139 million alone. Another notable name among auctioneers, Christie’s, brought in $6.2 billion in sales that year.⁶

Digital art: The vision of NFTs

In 2021, Christie’s was also the first major auction house to venture into a new side of the art world: NFTs.⁷ Non-fungible tokens represent assets (such as digital pieces of art) that have been turned into a token.

The first NFT sold by Christie’s brought in $69 million in 2021.⁷ After NFTs grew in popularity that year, industry sales reached a peak in January 2022, when over $17 billion worth of NFTs were sold in one month.⁸ By contrast, in May 2024, only $1.2 billion of NFTs traded hands.

A flashy portfolio

The market for art isn’t necessarily tied to the highs and lows of wider financial markets,⁹ which can be appealing to some investors seeking diversification.

On the flip side, art is not a liquid asset, meaning it cannot be readily converted to cash. Protecting physical art can be costly depending on storage and insurance rates; these variable costs should be accounted for, along with the risk of irreparable damage. Tastes in both art and investments can also be fickle, as what’s in demand now may not be the case when someone considers a sale.

The question of value is then on display: Liquidating art can be an easy or hard sell depending on changes in demand for a particular artist or work – and an understanding of what’s valuable. The selling process can involve getting a piece appraised and working with an auction house or agency to facilitate the sale. In addition to the final bid, or “hammer,” price, these groups can set a variety of fees and commissions related to each transaction.¹⁰

Art can also be considered an investment to buy and hold as part of a wider estate plan. A third of Americans (32%) plan to pass along an inheritance, even if it’s small, according to Empower research. Handing down an art collection could also be a way to help build generational wealth within a family.