The anticipated worldwide economic recovery is yet to materialise and the key financial markets from Tokyo to New York are still in an unfavourable state. Confused investors who are being forced to look for secure havens that will prove to offer good returns during recessions and financial commotion, are looking narrowly at the high returns yielded over the past few years from Fine Wine investment.
Few know that Fine Wine has outperformed almost every major financial index in the last two decades, and in some periods has even outperformed gold and crude oil investments. 5 year average performance of wines quoted on the Liv-ex 50 and Live-ex100 indices, the global marketplace, have showed growth of 270% and 192% respectively, effortlessly matching returns from other riskier investments.
Wine investment is not a new trend, however historically this lucrative division was traditionally the province of the knowledgeable few, but now an increasing number of investors are taking their first steps into this exciting market.
There is a wide choice of fine wine investment companies to assist people get into the market and help them throughout the process, whereby investors need not know anything about vintage wine. Buying investment wine from a reputable source and having it correctly stored is the very first step to ensuring the investment potential of a fine wine.
Generally, it is recommended investors consider Fine Wine as a medium to long term investment. Recent years have seen major price growth in the short term for specific wines, however, an investment period of 3-5 years should allow investors to benefit from the opportunities of a full market cycle and a longer phase of 8-10 years or more could see maximum returns.
Prices per case vary, but the top performers will demand over £5000 per case which can double in money. Given the current nature of the market first time investor’s budget should ideally contain a mix of traditionally good performing wines, such as one of the so called Big Nine most prestigious Bordeaux’s along with less well established, vintages.
Prices of cases may go down as well as up, and the ultimate endeavour is to depart at a profit. The catchword for any canny investor in these difficult economic times diversification and fine wine makes a great addition to any investment portfolio. What better companion could be asked for as we navigate through this rough economic period than some fine wine!