Benefits of Wine Investing

Wine investing has many palpable benefits. Before investing in wine, however, you should be aware that there are difficulties in this type of investment as well. Make sure that you do your marketing research and speak to an experienced professional. One of the biggest benefits of wine investing is that it is a tangible asset. Its quality improves with age. Plus, wine investing is non-correlated to common financial investments.

Tangible asset

Anytime there are economic woes and market failures, investors across the board will turn to investing in tangible assets. One of the great features for wine investing is that it is a tangible asset. It can be enjoyed as it reaches its optimal maturity for consumption. In general, tangible assets have a higher demand when financial market prices are slashed. Therefore, it makes sense to include wine as a good way to diversity your portfolio.

Quality improves with age

Unlike financial investments, wine will invariably improve in quality with time. When adhering to all the recommended provisions for storage and upkeep, the investment will invariably improve with age. That is the nature of wine. Financial investments, on the other hand, are constantly subject to market perceptions in order to uphold and improve their quality. For example, a bond is subject to many risks that are inherent to the bond markets themselves. They are constantly scrutinized and perceived differently by market participants. Their quality grades are constantly changing.

Non correlated to other investments

The fact that wine investments are not correlated to the broader economy makes it another great means for diversification. When the market is experiencing a failing economy, investors flock to tangible assets. Some of the most common assets are  collectibles, fine art or precious metals. However, these assets are normally non correlated, and yet, wine collections are even more independent than many other popular tangible assets.

Investment funds have poured money into investing in wine for the broader pool of investors. Investing in wine funds can be a hedge investment for the carefree rich investor who does not want to worry about the marketing and up keeping of the wine collection. Although wine investing carries the major aforementioned benefits, there are certain factors to watch out for including the following:

  • Storage efficiency
  • Wine brand
  • Economics

If the wine is not stored properly, it will instantly will lose its appeal for all marketing purposes. That’s why it is important to adhere to the auction houses’ recommendations in order to ensure the quality of the collection. The brand of wine and the year that it was bottled is also very important. Also, the wine should be a specific brand and year, to be profitable. The collection instantly loses its investment appeal if it is not quality because this asset class is so ethereal as a marketable investment. Also, you should be wary of the upcoming supply and demand of your vintage collection during the time it will be sold.

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