Someone very wise once said that keeping all the money in the bank doesn’t make you richer. This is true. Unless you invest, you won’t see extra profits. But what should you invest in then? Shares? Property? Gold? What could bring you high returns with minimal risk?
Let’s have a look at this example provided by City & Finance. What £100 invested in 1952 would be worth today? If you kept money in the bank you would now have £5,850. Investing in gold would get you £6,850; in property: £8,680; shares: £108,000. Not bad! However if you invested in fine wine, you would now have £478,000.
Interested? Let’s look at 5 main reasons why you should invest in wine.
- No limits to investing.
You can invest as little as £250 or as much as £250,000, however we would definitely recommend a starting point of £5,000. Wine is a long-term investment. Basically, the longer you hold on to a fine wine, the more consistent your returns become.
- Returns.
Wine as an investment has traditionally been associated with low levels of risk and stable returns. An average return is in the approx. 15% per annum over 5 year period. However a good wine from a good vintage can experience an increase in price between 50% and 100%. Moreover, some wines can have even a greater return; for example if you invested £450 in Chateu Latour in 1990, you would have now £6500.
- Tax.
Fine wine is a 100% tax free investment. It’s considered a wasting chattel.
- Asset that improves with age.
When wine reaches its maturity, it becomes more desirable and therefore more valuable. The supply of a particular wine from a specific vintage is finite, which means that when people drink a certain label, this particular wine becomes very rare.
- A great way to diversify your investment portfolio.
If you are already an investor, adding wine to your assets is a great way to diversify your portfolio. What makes this even more attractive is that, unlike the stock market or property market, wine investment is not dependent on inflation or interest rates. Even during market instability these premium wines continue to increase in value.
Wine investment can be a highly profitable and exciting business. With the right case of wine, your profits can increase dramatically. However it’s very important to choose wisely. If you’re not an expert, portfolio manager can help you pick the best option for your needs and answers all your questions.
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