Why invest in wine?
With annual growth rates in the region of 10-20%, fine wine possesses a remarkable track record as an investment.
While fine wine investment is no new phenomenon, today market liquidity and price transparency have evolved to the point where investors of all levels can profit from this expanding market.
Whilst many traditional investments have been static or seen losses over the last five years, investors in fine wine have continued to see double-digit annual returns over this time. Wine as an investment has traditionally been associated with low levels of risk and stable returns thanks to its very unique characteristics as an asset.
5 reasons to invest in wine now:
- Reliable returns- Fine wine has consistently offered investors double-digit returns year-on-year, with the market assessed as growing $5.5bn per annum. Demand from emerging markets is also set to ensure continued significant price appreciation.
- ‘Safe Haven’- Fine wine offers a greater degree of stability than traditional investment assets and its historically negligible correlation with traditional markets makes it a crucial buffer, diversifying and securing your investment portfolio.
- Past performance- As an asset class, fine wine has outperformed more established commodities including gold, equities and even property.
- Positive outlook- Chinese demand, having already increased 30-40% in the last two years, is forecast to grow further, with a further 54.25% growth in Chinese and HK wine consumption forecast for 2015.
- Golden moment- Demand for investment wine is set to increase exponentially. Economic forecasts suggest sluggish growth over the next decade in many other assets classes, while recent market readjustments have left previously stratospherically priced wines looking undervalued... there simply has never been a better time to take advantage of the opportunities in fine wine investment.
Less than 0.5% of all wine produced worldwide may be considered investment grade, with the investment market traditionally dominated by the big name chateaux of Bordeaux. The finite quantities produced, ever decreasing through consumption generally ensure predictable growth in the long-term with a perfectly inverse supply curve. What other assets can claim that! Fine wine is a tangible asset whose prestige and desirability increases with its value and so may be understood as a Veblen good.
The market for investment wine has shown a steady increase over the last five years, with the emergence of China as leading economic superpower further fuelling its expansion. Emerging markets across Asia, as well as the growth of the BRIC economies is exponentially increasing both demand and competition for a finite supply of fine wine. The delicate balance of managing supply and demand has probably never been more acute in the entire history of fine wine investment trade.
"Annualised real returns on fine wine from 1900 to 2012 beat government bonds, fine art and stamps"
The Telegraph, 20th May 2014
Investing in fine wine requires a lot less starting capital or initial outlay compared with other asset classes, you can get started from only $5,000. Investing in fine wine can be extremely enjoyable and profitable. We believe fine wine should be part of every investment portfolio!
If you want to learn more about this exciting investment opportunity please call our expert team on +61 (3) 9034 5255 or email email@example.com and one of our advisors will be delighted to help.
Alternatively, you can visit our Current Offers Page where you can access our most recent stock suggestions and accompanying analysis.
Finally if you have not done so already create your free, no obligation wine investment account and receive your own personal login and access to Cult Wines client investment opportunities.