Enjoying the UKV blog?
WATCH VIDEOS

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."

 

BUFFETT

 

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 Investing, Investing 2020

Charles Agutter

Written by Charles Agutter

UKV International

Recent Articles

Wine Investment Guides

intro
performance
taxation

Sign Up to UKV Wine Investment News!

WINE INVESTING VIDEOS

UKV International have produced a range of exclusive video content to support our wine investment journey and our exclusive wine investment events which we host on a regular basis throughout the year.

 

UKV Investors Q & A's

Feedback and opinions from fine wine investors and their buying and selling experience with UKV International and the wine investment services offered. 

 

UKV Wine Investment Events

Meet UKV staff and like minded investors at one of the UKV International events held throughout the year in London.  Available to existing investors only, as part of the UKV International Premier Client programme.

 

Vintage and Fine Wine Investment Explained

An insight into vintage and fine wine investing -  the leading alternative asset class, governed by a unique set of market fundamentals and possibly the investment of the last decade!

FEATURED ARTICLES

.

Take Advantage of the Fine Wine Boom in 2020!

wine-investment-graph

So, What Will The Wine Market Look Like in 2020?

According to the history books, fine wine is one of the most best performing assets of the last decade. However that doesn’t mean that the market never changes. Consumption and demand varies from country to country and emerging trends can often drive up the price of certain wines.

READ MORE

Fine Wine Investment: 4 Fundamental Rules to Success

4-rules

 There are only four fundamental ways to invest successfully in wine.

Investor behavior is determined not just by rational risk-return considerations, but also by hidden psychological biases that influence individuals to make less than optimal decisions.

FIND OUT MORE

Why do individual investors often ignore lucrative opportunities?

romanee

This behavior poses a conundrum, or seems irrational – and that’s because it is.

Alternative Investments pose an interesting paradox:  with the consistent growth and often tax-free capital gains these assets consistently deliver, why aren’t more  individual investors participating in the market to reap outsized rewards with relatively low risk?

READ MORE

.

Get the Latest Wine
Investment News & Insights to
your inbox every month!

Start your Wine Investment journey today.

UKV INTERNATIONAL AG can help select and acquire some of the best investment fine wines and champagne through our very extensive independent network of wine industry contacts.

We’re here to help potential and experienced investors who look to acquire the most prestigious vintage fine wine labels from the leading vineyards of France, Italy and Spain.

020 7471 8030

Follow Us:

GET STARTED
READ REVIEWS