• February 12, 2019

The Unique Potential of Wine as an Investment

It is not for no reason that most serious players in the market tend to diversify as widely as practicable when building their investment portfolios. Having a broad range of interests rather than placing all proverbial eggs into one basket is generally recognized as offering the best protection against market volatility.

When considering investment options those that will spring most readily to mind will probably be bonds, stocks and shares. Some knowledge of the market is in this instance most beneficial as it is of course helpful to be able to predict and pre-empt any significant movements in the market, whether for better or worse. Being one step ahead enables capital to be moved around to wherever the best return is likely to be made.

Alternatives to Stocks and Shares

But markets can take a sudden turn for the worse and their unpredictability can catch out even the most canny investor, and so it can be a good idea to consider other platforms. Currency trading is one obvious example; real estate is another. Property in modern times is usually considered a fairly safe bet for growth just so long as risky ventures are avoided and normal rules of engagement are followed. However even in real estate growth in the market is not assured, and so further options should be considered alongside it as some form of security.

Collectables and fine-art are often considered a reasonably secure alternative to more traditional modes of investment. The logic involved has it that as supply at worst remains constant and at best becomes more scarce, thereby pushing up value, it is difficult to envision a situation in which the value of such an asset can diminish. There are, as always, exceptions to this general rule, but as a guiding principle it is fairly sound.

Vintage Wine in Ever-Diminishing Supply

One commodity which falls very much into this category is fine wine. It is well known that the quality of any wine varies considerably according to vintage, and by definition the availability of any such vintage on the market can only remain constant or reduce once that year has passed. Suppliers such as Naked Winery are testimony to the value of good wine to the discerning customer.

Studies have shown that wine has consistently proved to be one of the safest and most lucrative investments around the world over the last two decades. Whilst as ever there is some element of risk involved, the basic rule of thumb that diminishing supply leads to increasing demand seems to be one to follow. And sticking to a few essential principles reduces what risk there is.

Experts in the field appear to agree that the best profits are to be made at the higher end of the market, with high value investments in the best quality produce. This, after all, is where scarcity is to found and demand is consequently at its biggest. In order to maximize returns, it is therefore best to think big and to spend big.

A pretty interesting post, huh?

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