Investments are excellent ways to make the money work for you. However, with some industries more saturated than others, finding a new market to put your money to work is a decision people should make. One of the best industries to invest in is the food industry—specifically through fine wines.
Telegraph UK claims that the wine industry is resilient to market swings. It only means that despite the changes in the economy, the market for it will continue to thrive and flourish. Another article states that the “non-traditional investment has yielded a 13.6 per cent annualised return in the last 15 years.” But why is investing in fine wines an excellent alternative to traditional investments? Here are some ideas.
1. Strong Return on Investments
The Telegraph reports that fine wines, on average, have a better return than gold or other commodities. It has a strong return on investments, especially when compared to a gold-based ETF.
The wine industry is stable and enjoys the highest returns in the financial world. The high returns are because the market is extensive, even for individuals. The investors get the money back through the sales of wine.
2. Alternative Assets Do Not Interfere with Traditional Assets
Fine wines are an excellent alternative investment as they are alternative to traditional investments. They are attractive to investors as they can be insured and stored in vaults or safes. Furthermore, the wine is timeless and does not require special handling or caring. Investors can rest easy knowing their investment is safe at all times. Another reason why fine wine is an excellent investment because it is not correlated to the stock market. That means the results aren’t affected by the stock market’s volatility.
3. Low Volatility Rate
Low volatility is another reason why wine is an excellent investment. The rates of volatility are meagre. Also, the minimum volatility rate is the weakest of all the asset classes. The volatility is low because wine is collectable. It doesn’t require any special handling or treatment, so there are no unique risks. It is a reduction in the attack on the product’s prices. It is one of the reasons why wine is an excellent investment.
4. High Consumption Levels
Another reason why wine is an excellent investment is that it is a product that has a high level of consumption. It is a benefit as the money you put in does not have to wait for long periods. It will be immediately returned to you.
Many people consume the product, so its high level of consumption is a plus for investment. Wine is famous because it is very durable and lasts a long time. The product also has a wide range of different types to choose from. You can also buy wine from other places around the world.
5. Tangible Ownership
Having a tangible investment is a benefit to any investment. The advantage of owning a substantial investment is knowing what is going on. It is an excellent investment for those who are aware of the market. With a tangible asset, you know where your money is going. Another advantage of owning a substantial investment is putting the money in a safe vault.
6. Defies Breakage and Spoilage
The wine industry is very secure. One of the main reasons it is safe is because of the nature of the product. The wine will not go rancid and can be stored in many different places. The reason the wine doesn’t go bad is that wine is expensive. The money you spend on fine wines makes it well worth it to ensure the product’s safety.
Best Practices for a Successful Wine Investment
As with anything else, the best practices for wine investment are the same as those for any other type of investment. The most crucial action to take is to do your research. Knowing what you are investing in and how it works will be essential to making money successfully.
1. Know Your Product
As mentioned previously, it is essential to do your research before investing. One of the best places to start is knowing the product you are investing in. The wine industry is vast and has many different types of wines. Knowing your favourite wine is an excellent start to investing in it.
2. Research the Different Types
Having a product in mind is an excellent start to investing, but there are many types of wine to consider. Each type has its characteristics and is produced in different climates. You can invest in boutique wines, smaller companies, or invest in large companies.
3. Make a List of Your Investment Goals
What are your goals behind investing? What do you plan to invest in? Are you looking to make a profit quickly, or are you looking to invest for a long time? Do you want to invest in real estate or a company?
4. Invest in What You Know
The last lesson to take away is to invest in what you know. For example, if you are a big fan of wine, you may want to invest in wines from different regions. Learning about the other wines and knowing what you like will help you make an informed decision.
5. Consider Cellar Management
When you purchase the wine, you should consider having it professionally managed. Having your wine collected and stored professionally is a great idea. It can help you to resell the wine later. Even if you don’t resell, having your wine professionally stored is a great idea.
Before Popping the Cork
The wine industry is vast, so that you can invest in many different ways. It is an excellent investment due to its low volatility, high consumption levels, and high investment returns. It is also a great alternative asset, not correlated to the stock market.
However, there are some different types of wine to consider when it comes to investment. The best wines to consider are the ones that are popular and of high quality. It is also essential to make sure you do your research to make an informed decision.
Cru Wine is an excellent place to start investing in wine. Since we carry the best wine investments, we can ensure our clients only the best quality products will become part of their collections and investments. Look and browse the fine wine market today by reading about our website’s basic things to remember.