We all enjoy a glass of wine from time to time. Whether we are happy or sad wine is a fine companion for a nice evening or night. But is wine just a drink to accompany us on a joyful day? The answer comes from investors and is definitely a “no.” Investing in wine is a smart way to grow your wealth without having to worry too much as it usually happens with more traditional ways.
According to a Bloomberg report published during the previous year, “investment wine even has its very own exchange. The London International Vintners Exchange, which came online in 1999, shed some much-needed light on what had been a very opaque market. It’s now the industry standard for tracking prices of luxury wine and includes the Liv-ex Fine Wine 100 Index, which follows the top 100 most-sought-after wines.”
Wine can be a useful tool for portfolio diversification. Wine experts from Cult Wines, which manages about $100 million in assets, told Bloomberg reporters that “it’s got a long-term record, it’s low volatility, and it’s an asset uncorrelated to the financial market.” To date this year, Sotheby’s has sold $64 million in wine with about 80% going to private collectors who plan on drinking it someday and 20% to investors. What really drives the wine market up is the booming demand in Asia. The Hong Kong and Singapore markets are leading the way, asking more and more bottles of good expensive wine to satisfy customers and investors, pumping up the prices.
The thirst for wine in Asia is real according to the wine merchant and luxury lifestyle service provider Sarment which has established its headquarters in South East Asia. “Our clients understand that financial returns are generally quite stable right now and wine investments give greater returns. Passion investments like wine complement their lifestyle, and unlike stocks, wine is something tangible that you can actually enjoy if you want,” Sarment’s general manager told ChannelnewAsia. During 2017 a CNBC report revealed that wine was the best-performing collectible of the rich. Fine wine was the best-performing collectible of the world’s wealthy collectors, with values soaring 25% over the past 12 months, replacing classic cars as the top collectible.
Any shareholder looking to bring a competitive edge to their portfolios of investments will allow fine wine diversification. Backed by a thorough understanding of the fine wine industry, the intelligent choice can lead to impressive returns. For this very reason, there has been an increase of interest in fine wine investments over the past decade.
Our article proves with real data that the wine market is increasing in size day by day. Opportunities presented in the wine market can’t be easily found if we look at more traditional ways of investing. Perhaps, the time has come to start looking at wine bottles with the eyes of an investor and not as an average consumer.