Sunday, February 28, 2021
Search for new investments
Art has also attracted small investors
After the hype about stock market apps like Robinhood, online platforms for art investments go one step further: For little money, investors can participate in works of art or vintage cars, for example. A work by street artist Banksy is "like a hot technology stock," explains one investment strategist.
Up to now, works of art or vintage cars have usually only been an investment for the super-rich. With the help of new online platforms, small investors are now getting into the mix too. Not only paintings by Picasso or classic cars by Ferrari are used as investment objects, but also rather unusual and comparatively inexpensive collector's items. If you find that $ 200,000 for a "Birkin" handbag from French luxury goods retailer Hermes or $ 150,000 for a trading card for the Nintendo computer game "Pokemon" is too much, you can participate in such things for a fraction of the cost via the Otis platform.
The company buys and certifies all kinds of collectibles such as hand-signed jerseys from the crashed basketball star Kobe Bryant. This means that investors receive a share in these objects and can trade them. Last year, Otis offered its customers shares in a work by street artist Banksy for $ 20 each. According to the company, they were worth $ 34 last month, up 70 percent. The total value of the artwork is $ 722,000. A set of basketball trading cards from the manufacturer Fleer from 1986 achieved the greatest price increase, adds Otis founder Michael Karnjanaprakorn. Within two months, the shares have risen from ten to more than 40 dollars. This information cannot be independently verified.
Rally works with a similar business model to Otis. According to its boss George Leimer, the platform doubles the number of users every 30 days and already has several hundred thousand customers. He compared the boom with that of stock market apps like Robinhood, which play a decisive role in the volatility of the US video game retailer GameStop. In contrast to the stock market, however, investors rarely reaped horrific profits, emphasizes Rally boss Leimer. The rate is "in the low single-digit percentage range".
Better not invest retirement savings in it
John-Paul Smith, a former investment strategist at Deutsche Bank who invests in Northern English art, sees little difference to the hype about Gamestop, Bitcoin & Co. "Banksy is like a hot technology stock. Psychology is similar in every market." In contrast to stocks or bonds, the prices of which are visible to everyone on the stock exchange, the valuation of paintings or collectibles is difficult. On the one hand, they have little in common and are usually only tradable at occasional auctions.
Basically, buying alternative investments is currently "less foolish" than it has been in the past 30 years in which he has been following the stock markets, adds Smith. Shares are expensive and the trillion dollar economic stimulus packages from states and central banks would one day lead to inflation. In any case, investors should be careful, warns the expert. "I wouldn't advise anyone to invest their retirement pension in it."
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