Fine art and jewelry is a unique asset class and an excellent way to diversify your investment portfolio as a potential hedge against market volatility and inflation. Fine art is unparalleled and such rare beauty, leading to its intrinsic value and a luxury market. In some cases, the value of a fine art collection is influenced by trends and a value trajectory independent from the larger economy compared to other world markets.

Just like fine art, jewelry emphasizes attention to detail. Fine jewelry has lasting sophistication and a ten-year value appreciation performance. Therefore, cultivating your fine art and jewelry collection through a trustworthy art and jewelry dealer presents a reasonable opportunity to diversify your investment portfolio. So how do you know which pieces are an excellent investment? Like many other investments, you have to step out of your comfort zone and do your research.

One thing about the art market is that it is fickle, and there is no guarantee for profits. However, it just takes a little research and legwork to invest in images that prove to be valuable assets down the line. 

The rarity of a work of art

Whether it’s fine art or jewelry, its rarity is what gives it more value. For instance, you walk into a museum or gallery, and a $5,000 piece of art catches your eye, but you can’t justify the costs. On the other hand, the gallery owner walks you into another section of the same artist’s work for a lower price, say $500, but they explain it is a giclee. A giclee is a machine reproduction printed on canvas or paper with clarity and color to match the original. However, it is still a copy.

Keep in mind that the work’s rarity makes it a valuable asset, and the original is always worth more than a reproduction. Some appraisers even perceive giclee as an imitation of novice artists. Even if it is much affordable, a giclee will not pull any future investment for you no matter how pleasing it is.

The value of fine art

Many factors determine the value of fine art. They include the significance of the work, the size of the edition, and the condition of the work, for example, if it is numbered or signed by the artist. For instance, a low run of a limited edition print is always worth more than a mass-produced image.

Fine art is a long-term investment when the art market is stable and shows a significant return on investment during boom times. But it is also another type of asset that can quickly drop in value during recession times. Before buying any piece or collection of art, research the artist who attracts your eye, their education, works, commission, and exhibits.

The bottom line

Fine art and jewelry offer you more ways to diversify your investments. But you must do your homework to acquire rare finds, expand your collection and accommodate your liquidity needs. With little legwork, you can unearth a rare masterpiece that is worth millions.