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Can investing in Fine Wine see us through market uncertainty?

Mar 9, 2020 5:42:21 PM / by Charles Agutter

In times of uncertainty and distressed markets, diversifying your investment portfolio reduces your risk - allocating investments among various financial instruments, industries, and other categories means you're not over exposed to any one asset. 

Do you have a healthy diversified Portfolio?

Having piece of mind knowing that your financial assets can with stand future events means your  family investments, property portfolio are not at risk of spoiling your future plans or retirement fund. You may not have the luxury of time on your side and your best laid plans could be scuppered as it could take a significant time to recover your losses.

For piece of mind, you can maximize returns by investing in different areas that would each react differently to the same event.   So when examining your current portfolio, are they able to absorb the shock of a future mini recession or a prolonged down turn in world markets?

There are a number of investment strategies to help act as a shock obsorber to your investment portfolios. Starting a  Fine Wine investment strategy is a popular strategy.  We ought to think more about fine wine as part of a healthily diversified portfolio, and appreciate its potential as a tool to circumvent market dips.  Not a field to be invested in exclusively, but rather as one part of a healthy spread of investments.

"Warren Buffett says a percentage of everyones portfolio should be in fine wine."


Just some of the reasons to diversify in wine investment are:

1) Escape the risks that affect most equities and conventional asset classes.

Now more than ever, this characteristic makes wine investment appear like a particularly virtuous asset. While other sectors are dragged or fuelled by market corrections and rallies, the success of fine wine is dictated by the simple tenets of supply and demand. It might seem intuitive, then, to think that consistent appreciation in fine wine prices over time is only natural. Save for a sudden decline in demand for wine consumption or collectability, the steady decline in stocks of any particular bottle of wine correlates directly to an increase in its respective value.


2) Wine collection lets you keep more of your gains.

Unlike some other forms of investment, wine collections aren’t taxed, and the profits accrued from collecting wine are exempt from tax in many countries.


3) The Ding Hong Effect: specialist Fine Wine Fund is returning

For those who don’t know, Ding Hong was the most successful wine fund ever, and a 2nd phase has just been confirmed.  The best performing wine fund  has been dormant for 9 years,  but its now making an  exciting come back!

The same market conditions are in pace as they were 9 years ago.. it made over 125% across 5 years.

By simply ‘piggy-backing’ and investing into the same wines that will go into the fund means investors are likely to see significant gains across the next 5 years.

Should the new phase be bigger as rumored, this will result in purchase of stock well in excess of the original $110m launch over the next 12-18 months which can only have a positive effect on the activity of trades and values of the wines.


4) It has offered reliable growth in recent years.

Aside from the bounce caused by high-net-worth Chinese investors entering the market at a rapid pace, the last decade or so has seen fine wine investments appreciate by around 10% per annum. During 2018, OenoFuture reported that its Private Investor accounts yielded average returns of 11.93%.








Topics: Fine Wine Collecting, Wine 2020

Charles Agutter

Written by Charles Agutter

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