There are several good reasons to invest in wine.
The fact that the Liv-ex Fine Wine 100 Index grew at a rate that was substantially greater than the FTSE 100 in the decade from 2003 to 2013 is one reason that more and more open-minded investors are thinking of branching out into bottles.
Newspaper headlines often tell the stories about fine wines that have reached heady prices at auction and this, along with the certain cachet that goes with this type of investment has drawn people from every part of society to think about investing in wine, rather than simply putting their money in the bank.
But should you even think about investing directly in wine if you don’t know what you’re on about? It can be a tough call when you’re sitting round the dinner table with a load of wine-buffs if you don’t have the vocabulary that goes with describing why you either like or don’t like a wine. At that level, not knowing the difference between your grapes or vintage, or which wines are good for laying down and which should be drunk young, isn’t a major issue; but if you’re trying to make money from your purchases, surely you need to know more than that? The answer to that is, it depends really.
It depends why you’re investing in wine. If you’ve decided that you’d like a new interest and you have some spare time and some spare cash that you can afford to ‘play with’ in the hope of making a return then you’re probably prime for giving it a go. If you’re adding investment in wine to a well-rounded investment portfolio, with the aim of growing your annual returns, then you probably either need to know a lot more about it, have a whole load of luck or pass your money over to someone else who knows more about it.
Although there are few wine funds available that are collective investments, it’s only fair to say that as an investment sector it’s not exactly booming and has had its fair share of criticism from both Financial Conduct Authority as well as investment experts. But this doesn’t necessarily mean that reasonable funds don’t exist. So, if you want to diversify your portfolio and fancy dabbling in wine, then so long as (like any unregulated investment), you are prepared to face the downs with the ups, then plumping for a wine fund mightn’t be a bad idea.
On the other hand, if you fancy dabbling in a new hobby and learning a bit about a highly pleasurable consumable (when consumed in moderation of course) along the way, then buying and selling wine is as, if not more enjoyable than any antique collection.