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10 Reasons Why Fine Wine Makes for a Great Investment

According to Statistica, globally, the wine market is expected to grow by 8.5 % during the period 2021-2025. [...]

According to Statistica, globally, the wine market is expected to grow by 8.5 % during the period 2021-2025. This growth presents investors with an opportunity to invest in a product that experts refer to as a haven of investment. Investors always trade the concept of risk and return while choosing a portfolio. This implies that to make a huge return, you must be willing to take a huge risk. Wine investment has proved this concept wrong making it one of the most profitable investment options in the following ways:

1. Wine has proved to be resilient to market movements. In the wake of the Covid-19 pandemic, most stocks that were previously thought to be stable have taken heat. British Airways and Intercontinental hotels are some of the prominent names which dropped by a huge margin. In contrast, a fine wine investment from Liquid Opulence, a leading wine portfolio in UK reported the least decline. This proves that the wine portfolio is a stable investment that can withstand market shocks.

2. The Highest return on investment. According to Forbes, the wine portfolio has witnessed tremendous growth of up to 200% more compared to stock over the last five decades. Someone who invested $100 in wines in the 1950s is now worth an estimated $450,000 more than someone who invested in stocks.

3. Wine is less volatile than stocks. Volatile investments allow investors to earn huge rewards, but they also present the highest risk. Over the last five decades, the wine portfolio has shown a slow but consistent growth, an element of a great portfolio.

4. Low barriers to entry and exit. Investing in wine is simpler than investing in stocks. With less documentation, low initial capital, little government legislation, and high availability of information, the wine portfolio is easy and simple to acquire.

5. Low taxes. Investing in wine attracts low taxes, both in terms of capital gains and income tax. Unlike stock investment, which is subjected to double taxation, wine investment is treated as an ordinary purchase, hence lower taxes. Some of the taxes that wine investors avoid include capital gains, VAT, customs, and excise duty, income tax, and other taxes on profits.

6. Wine has proved to be an excellent hedging instrument for investors. Covid-19 pandemic and Brexit are two major events that have demonstrated wine’s ability as a hedging instrument. While most sectors of the economy, including tourism, manufacturing, education, and education, were taking the pandemic wine’s heat, stood out for one simple reason, increasing demand for the product. This ability to withstand global events makes it a good hedging instrument.

7. Wine has a globally growing market. Unlike most blue-chip companies, which have reached maturity, fine wine continues to penetrate new markets. According to Statistica, traditional markets like the USA, France, and Italy continue to experience stable growth with new markets emerging in Asia, Africa, and Latin America. This gives wine investors a guaranteed positive return on investment.

8. Wine is a fun and exciting way to invest. Unlike mutual funds, stocks, forex, and cryptocurrencies, investing in fine wine is fun and exciting. Instead of crunching numbers and interpreting economic models, select your favorite wine bottle and watch your money grow. However, always talk to experts to understand the dos and don’ts to get a high return on your investment.

9. Investing in wine is simple and easy. You don’t need to be a CPA to understand the parameters of wine investment. Great taste in wine to pick the best bottle is all you need to be a great wine investor.

10.Long-term investment. Great wine takes time to mature, so the longer it takes, the better it becomes. This makes fine wine a great retirement portfolio or even a great portfolio for your kids to inherit.

If you love great wine, this is a good time to make your love for wine work for you. Invest in fine wine and watch your wealth experience sustainable, stable growth.

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Laura.Bartlett

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