After stock exchange apps experienced a real boom in investment trading in the recent past, internet platforms for art investments are now going one step further. It is currently possible to invest in vintage cars or works of art for comparatively little money . For example, according to one investment strategy, works by street artists like Banksy are “hot tech stocks.”
Otis as a Provider of Art Investments
Until recently, vintage cars or works of art were only considered an interesting investment option for the super-rich. However, there are now new online platforms that are now also suitable for small investors. Classic investment objects are not the latest Porsche models or paintings by world-famous artists such as Picasso.
Instead, comparatively cheap and rather extravagant collector’s items arouse the interest of investors. So if you don’t want to invest 218,430 USD in a new bag or more than 109,215 USD in new Pokémon trading cards, you can get much cheaper, interesting forms of investment via the Otis portal for a fraction of these costs.
Examples of High Performance
The company Otis has specialized in buying all imaginable collectibles and then securitising them. This concept is based on potential investors securing their shares in the objects and trading them. One example last year was shares in an artwork by street artist Banksy that changed hands at a $20 share. According to the provider, the value of the shares increased to $34. Accordingly, the plus amounts to 70 percent. The complete work of the artwork is approximately $722,000.
A set of Fleer basketball trading cards from 1986 saw a particularly large increase in value.
According to Otis founder Michael Karnjanaprakorn, the value of individual shares increased from ten to more than $40 within two months. However, these performances cannot be independently verified.
Alternative Investments at Rally
Rally follows a similar business model as Otis. If you believe statements by Rally boss George Lemire, the number of users of this platform is doubling every month.
That’s why Rally now cooperates with several hundred thousand customers. However, Lemire emphasizes in this context that acquired profits rarely reach the level of stock investments. Instead, the rate is in the low single-digit percentage range.
Do Not Use Investment for Retirement Provision
However, this forecast is contradicted by John-Paul Smith, a former investment strategist at Deutsche Bank who specializes in investments in northern English art. In his opinion, there are only marginal differences to the GameStop or Bitcoin boom.
However, the only difference compared to bonds or stocks would be that the prices of these forms of investment are clearly visible on the stock exchange.
In the case of collector’s items or paintings, however, the valuation is much more difficult. Therefore, these investments can only be traded at occasional auctions. Despite these difficult circumstances and “unpredictability”, so-called alternative investments are much less unusual today than they were 30 years ago. On the one hand, stocks are expensive. On the other hand, stimulus packages from central banks or states worth billions could also cause inflation in the next few years .
Nevertheless, caution is required when investing. According to the experts, it is not advisable to use alternative investments for old-age provision .