Oxstones Investment Club™Some wine bottles taste so good that they could be worth $400 and not $40. Whether you’re a wine aficionado or an investor intrigued by this liquid asset, know that trading fine wine can bring remarkable returns. While there are certain risks involved, most people would agree that fine wine investments are much more profitable than other commodities, like shares for example. Here are some tips on smart investing that may help you hit the jackpot in a few years.
Love vs. Profit
Are you looking to invest in wine because you genuinely like the beverage, or are you doing it for money? Some people do it for both reasons. If you’re planning on investing because you’re a wine connoisseur, this gives you the opportunity to select wines that you truly enjoy. With a bit of luck, their value will also increase in time.
Storing wine bottles that you’re planning to drink in a couple of weeks is a lot easier than storing wine you want to sell in 5-10 years. It’s important to keep the bottles in flavor and optimal stable conditions, like a bonded warehouse for example. When exposed to cold temperatures, wine produces flaky crystals that spoil its taste, and thus diminish its value. Make sure that your storage area is dark and that humidity levels are appropriate for your specific type of wine. If you’re not a specialist, knowing these things are vital for business.
Fine wine vs. other types of investments
Unlike investment bonds, unit trusts, and equities, fine wine is tax-free, consumable, and ultimately, low risk. Because of its declining availability, the demand is booming thus outperforming other forms of well-known investments. Over the years, fine wine has remained the sturdiest investment form; the industry was not affected by the recession, stock market fluctuations or interest rate changes, which means if you want to invest, do it.
As opposite to property or art, wine features some pretty clear advantages. Its value increases in time, it can be easily and conveniently stored, and it doesn’t call for a lot of maintenance. Both property and art demand a lot of care, which means in time you won’t make that much money since you’ll be spending on maintenance.
Personal ownership of a physical asset
Wine is a consumable, tangible and transportable asset. Bonded warehouse accounts, invoices and payment receipts all confirm the exclusive ownership of your purchase. Unlike other investment types (that you can’t access whenever you want), you can always take a bottle of your finest wine, open it and enjoy it.
An investor with a keen interest in the wine business should diversify his portfolio by investing. Smart selection of the product backed by a comprehensive understanding of the market can possibly trigger remarkable returns. The popularity of type of investment will never decrease. Considering that the demand is so high and the supply so low, in a few years some of the best wine bottles will most likely be valued at thousands of dollars.
Investment performance of fine wine in the recent decades
Fine wine investment is not a new type of trade. Back in the 90s, before the industry developed into an acclaimed type of business, wily buyers would purchase more bottles than they could drink. Thus, they sold the extras at a higher price and made a little money on the side. Nowadays, people are consuming wine in excess, which means the supply diminishes while the demand increases. This makes the wine industry develop into a profitable type of investment.
General prices for some of the world’s best wines have increased by 10% per year in the last 25 years. Well-known regions like Burgundy and Bordeaux produce the finest wine, thus convincing more and more investors that an investment in fine wine can bring them stellar returns. The market has been stable since 2012; prices remained flat throughout 2013, and while France is still on top, other regions and countries have started to enter the market and draw attention. Prior to making an investing and spending money, get to know the wine market first. Check out wine websites and blogs, get a feel of the industry, and consult with professionals to secure your investment.
Tags: alternative asset class, alternative investments, bonded warehouse for wines, Burgundy and Bordeaux produce the finest wine, consumable assets, diversify your portfolio, enjoying your investment, fine wine investment performance, fine wine investments are tax-free, hard assets, investment, liquid commodities, liquid gold, liquid investments, non-correlated asset classes, smart tips for wine investing, storing wine bottles, transportable assets, wine aficionado, wine business, wine connoisseur, wine investing tips, wine investment, wine investments vs other alternative assets, wine investor