Ever thought about investing in the wine market?
To some, investing is buying into a broad portfolio of stocks across sectors and geographies. More adventurous investors may want to broaden that out to bonds, commodities and foreign exchange. But you can diversify further, and included in this area of esoteric investing is the wine market.
No financial advisor would recommend the wine market to anyone that had not first invested in a more traditional portfolio. And anyone looking at wines should be aware that it is a relatively expensive area to become involved with. But wine is a tangible asset and you are buying physical stock.
Giles Cooper, marketing director at BI Fine Wine & Spirits Merchant, which runs a wine investment portfolio service and trading platform, says that an investor should first look at how much is available to them to invest. The fund manager will then suggest wines that fit the client’s requirements and a bespoke portfolio will be put together.
BI offers cases of wine from around £500 up to around £40,000—£45,000 for a case of Petrus.
The cost of this service? Cooper explains that BI’s profit is purely in the spread between the buy and sell price. In terms of performance, BI has returned an average of ‘around 10%’ to investors over the last four years, but 2017 has been a good year with an average of a 22% uplift in values.
In terms of outlook, Cooper says that 2018 is set to be as good as 2017. The performance recently has been lifted by the drop in sterling. He says that fears around Brexit have not shown themselves up in the wine market.
Beware; investing and trading in the wine market is unregulated and so there is not the same level of protection that is given to the more traditional markets. But if it does all go wrong, you can always liquidate your holdings and take delivery of the wine that you have invested in.