Millennials are reshaping the world one beloved institution at a time, and their latest investment trend is taking the art scene by storm.
More young people, especially those in the mid-20s to mid-30s are engaging in the art market, and they’re more likely than other generations to acquire art as an investment. A few of them are even relying on “flipping,” otherwise referred to as purchasing a piece with the hopes of reselling it quickly.
Reviving art as an investment
Millennials interact with the art world through a variety of different mediums, new and established. Though museums and the like persist as essential viewing and valuation platforms for art, they haven’t exactly adjusted to the demands of younger generations.
Many young enthusiasts enjoy building relationships with galleries– often preserving these connections through their online presence. They also typically take pleasure in the energy and networking opportunities of art exhibitions.
Overall, however, the biggest evolutionary point driven by young people is growing popularity of social media and online commerce. Millennials use social networks to get in touch with artists and find new work. They are also more likely to buy works online than older generations.
Drawn to artwork that has weight and reflects what is important to them, young buyers are building collections that are more personal and diverse. Millennials, in particular, aren’t as inspired to purchase big-name artists or blue-chip pieces, preferring instead to discover the art world’s next rising favorite that may be flying under the radar.
Young collectors value their art for a wide range of factors; nevertheless many are starting to collect art as a financial investment or financial method.
In truth, millennials are twice as most likely to see art as a financial asset, according to 2018 information from Bank of America’s US Trust Insights on Wealth and Worth report. Moreover, 85% of millennials stated they were likely to sell in the next year, whereas just 41% of Gen X collectors and 24% of baby boomers reflected this ideology.
Generally speaking, art flipping refers to the swift and financially advantageous resale of an under-priced piece. Hardly reserved for the art world, flipping is a frequently observed tactic that’s regularly practiced in almost all markets.
Though the concept of ‘flipping’ is nothing new, millennials are reviving the practice. They’re more likely than other generations to examine a work’s price, or its potential price, instead of the visual appeal of the piece before deciding to purchase.
The amplified emphasis on flipping has actually been exaggerated by the emergence of businesses like ArtRank or Arthene, which provide “buy” and “offer” rankings for art, much as financial analysts provide for shares of publicly held companies.
Since the art market can be unpredictable, however, there’s never a guarantee that a purchase will grow in value. Inclinations come and go, so the gain on an investment often depends upon a number of factors, including timing or current social trends.