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Why invest into wines?
A well-diversified portfolio is essential for managing risk and countering periods of volatility in the market. A traditional portfolio includes a mix of stocks and bonds, but there are a host of alternative investment possibilities to choose from.
Wine investment is one of them. Similar to investing in fine art or antique cars, wine investments center on the acquisition of a tangible asset whose value is expected to appreciate over time. In this case, you're purchasing and storing bottles of wine, in anticipation of selling them at a higher price point later.
Fine wine investment
Cult Wines, which trades wine on behalf of private investors, is one of the beneficiaries. The London-based company Cult Wines has seen the assets it manages surge from £33m in 2016 to £121m this year as investors have been drawn back to the sector.
Here we have the relative performance over six months, a short term time frame by any other than a day-trader yardstick. Hands up all those who foresaw an escalation in trade war tensions three months ago, and did something about it, i.e. buy gold. Of course a magician would have bought oil in March and switched into gold in June, but that’s not the way life is.
10 tips for investing into wines
1.
Focus buying from best estates from the old world
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Provenance & Storing your wines in right term are key
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Use as a diversification tool
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Think through taxes for selling wines in future
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Let professionals to manage your portfolio
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Invest in wines with a medium-long term view
4.
Understand the associated risks and benefits
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Buy Wines with a high Robert Parker (RP) Score
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Always check the prices for investment grade wines.
10.
Invest in wines that offer value and growth potential