Why the Wealthy Invest So Much in Art Even When It Makes No Financial Sense

Art may not yield income or certainty of return, yet for the world’s wealthiest, it remains one of the most desired and enduring forms of wealth.

Mollie Wilmot lounging at home in Palm Beach with her Picasso, ‘La fenêtre ouverte (The Open Window)’ (1929), photographed by Slim Aarons.

The latest UBS Art Market Report (2025) reveals a striking trend: art now occupies an unusually large share of the portfolios of high-net-worth individuals. Across the survey’s respondents, allocations to art ranged between 15% and 24% of total wealth, a remarkably high proportion for an asset that pays no dividend, cannot always be easily liquidated, and is inherently uncertain in value. For the ultra-rich, those with assets above $50 million, the average allocation rose to 28%, and almost 40% of that group reported holding 30% or more of their wealth in art. This article is based on those numbers being broadly correct.

At first glance those percentages strike me as high. Why commit such a large proportion of one’s fortune to objects that cannot generate income and may be difficult to sell? The answer probably lies less in financial logic than in psychology, status, and the nature of wealth itself.

For most investors, art is illogical; for the very rich, it is almost inevitable. Once an individual has acquired homes, vehicles, and a portfolio of traditional assets, consumption gives way to significance. There comes a point where money can no longer buy more comfort but it can add distinction. It becomes the natural progression: the visible expression of discernment, intellect, and with it comes identity. A great painting or drawing speaks of education, cultural awareness, and, above all, permanence.

Art also offers a kind of ownership that transcends the financial. Unlike a yacht or a car, which require maintenance and usually depreciate over time, a great work of art offers daily engagement and aesthetic reward. It is a private theatre of meaning and a tangible reminder of your own taste and history. You will find collectors describing their works not as “investments” but as companions.

Bubbling beneath the surface, art performs a subtle economic role as a hedge. Not necessarily against loss, but against boredom and sameness. Traditional wealth instruments are abstract and impersonal; they exist in statements and percentages. Art, by contrast, is visceral. It engages emotion and intellect in equal measure, provokes discourse. In an increasingly digital and ephemeral world, the physicality of a work of art, its texture, presence, and rarity exerts enormous appeal.

This is not to say that art lacks the financial dimension. It has to. In its upper echelons it comes at a shocking buy-in but for the very wealthy, art can behave like a slow-moving store of value. Prices tend to be relatively stable over time, especially for artists with established reputations. Market corrections are rare and usually heading north. Setting aside speculative contemporary works, pieces by canonical artists from Old Master drawings to early-20th-century moderns tend to hold their worth across generations. Yet even then, the return is rarely financial in the conventional sense. It is more a form of wealth preservation as a byproduct of cultural stewardship.

Francis Bacon’s ‘Study from the Male Body’ (1986) hangs in the hallway of Donna Karan’s Manhattan apartment.

There is also a profound social element. Art collecting remains one of the few spheres of life where wealth, taste, and intellect intersect visibly. It offers entry to an elite network of galleries, museums, biennales, and foundations where cultural engagement becomes both a pleasure and a signal. In that sense, art functions as social currency: proof that wealth is not merely accumulated, but cultivated. The very wealthy are not always remembered by the ensuing generations but as art collectors, particularly who formed collections of substance they are recognised, their names attached in perpetuity to a significant provenance.

Critics might argue that this is a luxury of surplus and that when all other needs are met, art is simply the last available indulgence. That interpretation misses something essential. The act of collecting is not merely acquisitive; it is preservative. The collector who acquires a 500-year-old drawing or a modern masterpiece does not just own it they continue it, helping with good stewardship its survival into another era. In that continuity lies a sense of meaning that no financial instrument can equal.

So while art may not offer income or certainty, it offers something more resonant: a bridge between wealth and legacy, between material success and cultural identity. The UBS data shows that for those who can afford to think in centuries rather than quarters, art remains the ultimate store of value not because it guarantees a return, but because it gives wealth meaning.