Beware of MasterWorks Selling Shares of Art

Folks: sorry, this is not an announcement of a new funny painting, but know there is one in the works. I wanted to let you know about Masterworks. This company is allowing investors to buy “shares” of high-priced artworks. For just $20, you can claim to be one of the owners of a Warhol painting purchased at auction last year for $1.82 million.

Sounds interesting, right? I did some research on the Warhol painting. The ‘Dark Marilyn’ is one of many in a series that Warhol painted/lithographed from 1978 to 1982. There are many other ‘dark Marilyn’s’ in this series. The price Masterworks paid for the Warhol is a current fair value. It is true that some great master works of art do appreciate to sell in the hundreds of millions of dollars. But that appreciation happens when there is 20 or more years between buying and selling. In 20 years, you could earn far more money by just sticking $50 in a low-cost index mutual fund. So be careful.

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