The Groove 235 - Smart Money Buys Art When Markets Get Messy
Welcome to the 235th issue of The Groove.
I am Maria Brito, an art advisor, curator, and author based in New York City.
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SMART MONEY BUYS ART WHEN MARKETS GET MESSY
Andy Warhol, Double Elvis (Ferus Type), (1963), was one of the works used by Steve Wynn to secure a loan in 2014.
If you’re paying attention to markets right now, you can sense the tension.
Tech valuations are inflated and twitchy. Bond yields may be higher, but inflation is persistent. Cash looks safer than it did, but it’s losing buying power year by year.
No surprise then that smart money is circling back to real assets: those things you can’t print, engineer, or conjure with derivatives.
Think about what that means. It’s gold. Real estate. Farmland. And yes, art.
Serious collectors and wealth managers have understood this for generations. But too many private collectors forget it in the heat of the art world’s trends and social posturing.
Art is a real asset. It’s a cornerstone of diversified wealth strategy. And in this moment, this messy, uncertain, and slower market allows for a chance to buy wisely.
Art Isn’t Just a Luxury. It’s a Scarce Asset.
One of the simplest reasons art works as a real asset is also the most powerful: it is scarce.
You can print more dollars. You can split stocks. You can engineer bonds. You can’t make another Guernica. You can’t mint another Rothko.
Even for prolific, living artists, production is finite. Career-defining works are rarer still, and critical consensus is painfully slow to develop.
Great art is inherently limited. And scarcity matters.
Just like gold, which doesn’t yield anything or generate cash flow, yet remains prized because it’s durable, non-replicable, and universally understood as value, art’s worth rests in its irreplaceability.
It’s Not Just Theory: Real Wealth Treats Art Seriously
If you think this sounds abstract, let’s be clear: the most sophisticated families and investors don’t treat art as a frivolous luxury. They treat it as an asset class.
I remember vividly when I was practicing corporate law back in 2008, my final year at a big firm before launching my own art advisory business.
2008 was chaos for the global economy. Lehman Brothers collapsed in September. By December, Bernie Madoff’s Ponzi scheme was exposed, evaporating billions in client wealth. Confidence in every asset class was shaken.
But I was working on a large financing deal for a client who owned multiple businesses. And despite the panic in the markets, part of the security package for that loan wasn’t real estate or projected cash flows; it was his art collection.
Banks didn’t blink. They ordered independent appraisals, calculated loan-to-value ratios, and treated those paintings exactly like prime real estate or manufacturing equipment. This wasn’t unusual at the top end of private banking.
And it isn’t just private, under-the-radar deals.
In 2014, casino magnate Steve Wynn famously used major artworks, including Warhol and Pollock, as collateral for a $150 million line of credit with Bank of America.
He didn’t just love those paintings (though he absolutely did). He understood they were hard, bankable assets. Assets that could unlock liquidity without ever leaving his walls.
Art collecting at that level isn’t just about taste. It’s about treating art as a serious piece of a diversified, sophisticated wealth strategy.
Art Doesn’t Move Like Securities
Another reason art is valuable in a portfolio is that it doesn’t follow the stock market. When stocks crash 20 percent, art doesn’t automatically crash too.
Bonds can lose value when interest rates rise. Real estate can slow when credit gets tight.
But a great Richter or Kusama painting doesn’t care about quarterly earnings or central bank meetings.
Of course, art has its own cycles. Prices can go up and down. But it moves on its own terms, not just because the stock market had a bad day.
That’s why collectors see it as a stabilizer; something that can help balance the ups and downs amongst the rest of their wealth.
Lesson 3: Buy Before the Crowd Catches Up
Museums aren’t always first, let’s be honest.
But when they’re good, they buy before the market explodes.
In 2008, the Whitney Museum acquired Mark Bradford’s “Bread and Circuses” (2007) for a fraction of what his large-scale works now command. At the time, Bradford was moving up, but not yet a market darling.
Museums don’t wait for an auction record, they often help create it.
Collectors who want real value that’s not just financial, but cultural, should aim to do the same.
Smart Collectors Don’t Buy Just Anything
This doesn’t mean all art is equally good as an asset.
Banks aren’t interested in decorative prints. The works that hold value are:
• By significant artists with established markets.
• Well-documented in provenance and condition.
• Recognized in critical discourse.
• Scarce by nature of medium or scale.
Buying art as an asset means being rigorous, not impulsive. You must know why something matters and what role it plays in your collection.
Why Now? The Opportunity In the Slowdown
Why make this case now?
Because the art market is cooler than it was. The frenzy has calmed. Speculators have pulled back. Some collectors are waiting for “certainty.” But markets don’t reward certainty. They reward conviction.
This is the moment when serious buyers get access. When galleries negotiate and great pieces resurface quietly because someone else wants liquidity.
If you’re waiting for the crowd to reappear, prices will already be higher.
Own What Lasts
Real assets are those that survive inflation, volatility, and time.
Gold. Land. Buildings. And art.
But art has something the others don’t: it isn’t just durable value. It’s cultural meaning. Emotional connection. Human legacy.
It’s wealth you can live with, enjoy, share, and pass down.
If you want to think about your collection as more than decoration and as part of your real, lasting wealth strategy, this is the time to do it.
Let’s talk.
Buy Like a Museum, Think Like an Artist
Buying like a museum doesn’t mean buying safe.
It means buying smart. Buying with vision. Buying with a sense of legacy.
Museums buy for history.
So should you.
Because if you do it right, your collection isn’t just your story. It’s the story of our time, told through your eyes.
If you want to talk about building that kind of collection, you know where to find me.