Investing in a "fractional share" of a painting is an interesting idea (and allows people to learn/gain an appreciation for art). But when you invest, what do you really own?
I guess you can think of it like securitisation. How can an investor purchase pools of mortgages and earn yield from the payments? Mortgages are securitised, transformed into MBS securities, and sold to the public.
Art, is therefore, being securitised, fractioned into pieces of ownership, and sold.
In a secondary market, an investor can then sell their portion, at which point the forces of demand and supply will engage in price discovery, much like it would for any other asset.
Thanks for the mention, highly appreciated!
Anytime :)
Investing in a "fractional share" of a painting is an interesting idea (and allows people to learn/gain an appreciation for art). But when you invest, what do you really own?
Can you rephrase the question? Similar to that of a fractional share, you own a portion of the underlying asset?
I think I am just confused on how fractional shares are created from a piece of physical art.
I guess you can think of it like securitisation. How can an investor purchase pools of mortgages and earn yield from the payments? Mortgages are securitised, transformed into MBS securities, and sold to the public.
Art, is therefore, being securitised, fractioned into pieces of ownership, and sold.
In a secondary market, an investor can then sell their portion, at which point the forces of demand and supply will engage in price discovery, much like it would for any other asset.
Thanks for the mention! I appreciate it. Have fun on your travels!
Anytime Brian, really enjoyed that memo. And thanks, can't wait to visit an airport again!
You may feel differently once you see the lines and your flight gets unexpectedly cancelled! It’s wild out there…