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Sunday, February 5, 2023

Street Art as an Investment!


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Let’s be clear, we all love street art for a variety of personal reasons – its beauty, the message it conveys, its originality and so on….

There is also one MAJOR reason above all others that we can all agree on – street art is a truly great investment. It successfully rivals pretty much every other type of purchase, as we shall show in this blog. Artists like Banksy, Basquiat, Invader and Kaws deliver fabulous capital growth putting the traditional asset classes, such as property and gold, to shame.

The figures speak for themselves:

The yearly return on investment (ROI) for Banksy works over ten years is around 37%. Prints that once sold for only £40 can now sell for over £150000. In fact, the original Girl with Balloon work was sold for £37,200 by Sotheby’s in 2007. It was later moved from the side of the East London shop on which it had originally been painted and sold for £500,000 in September 2015 – This is an ROI of 1244% (or a 13-fold return on the original investment)! You would be hard-pushed to find a product that matched this jaw-dropping return.

Invader has seen fast growth, with his ROI over ten years being between 32-40%. Some works, such as his Aladdin sane collection, are upwards of 100% growth.

Over twenty years, the art of Basquiat has had massive growth, achieving a ROI year-on-year of between 16%-29%. After his death, the price of his works increased four-fold overnight.

street art investment ericartuk roi invader kaws Ankle Bracelet pattayatoday
Ankle Bracelet, KAWS.

Kaws has achieved 21-38% on his works over eight years, and has beaten industry standards.

Compare this to the average year-on-year ROIs for most traditional art being only 4-8% over the last twenty years.

The return generated by these four artists has far outperformed the gain which a traditional investor would have realised had they entrusted their capital into the following core indices and investment trusts:

  • S&P 500 – 5.6% over twenty years
  • Dow 30 – 6% over twenty years
  • FTSE 100 – 5.8% over twenty years.
  • REITs over twenty years – 5%

The only asset to have outshone all of these has been cryptocurrency, with bitcoin achieving 230% ROI every year over the last five years and some, such as Verge and Railbloks, achieving 100,000% ROI within just one year. However, unlike street art where there is nowhere to go but UP, this asset class is incredibly risky.

Some Golden Rules to keep in mind when buying:

  1. You have to like the work
  2. You should also like the artist
  3. Aim to keep the work for at least two to five years
  4. Only buy works from trusted sources, such as Ericart UK
  5. Check the condition of the artwork and the paperwork before buying
  6. If you are buying over the net, ensure you receive a video clip of the artwork
  7. Beware of paying over the top commissions and other fees often charged by galleries
  8. Think about using Bitcoin or Ethereum as a payment method in order to speed up cross-border payments and avoid bank charges
  9. Always compare prices being offered by agents, dealers and galleries
  10. Ask Ericart UK to submit prices
  11. Remember, art as an investment does not have to be the exclusive preserve of the rich!

Any thoughts on what we have to say? Please share them by e-mailing [email protected]. The best response will win a set of our crypto artwork.

P.S. The views in this article are based on our own opinions which, although grounded in hard research, do not constitute investment advice. Do your own research before making any buying decisions!
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