Even though there’s news afoot today that interest rates are finally likely to be on the rise, there’s no getting away from the fact that for the time being, savers are looking at pretty poor returns. So, with interest rates at pitifully low rates, everyone and their dog is on the lookout for alternative ways to get a return on their investment.
Pooled funds, property, pensions, ISAs and even premium bonds all have their place in a well balanced investment portfolio, but once you’ve had your fill of all that normal stuff, where can you look to make a return on your investment? Perhaps investing in art or antiques floats your boat; or even buying and selling wine? Wine is an investment opportunity that is growing in popularity across a whole range of investors.
Because it’s not only an interesting investment vehicle, it’s a way of potentially making a serious return over the years.
When you look at wine as a product, at its most basic it’s a simple result of the fermentation of mashed grapes. So what on earth can make it a viable and serious investment? Like any other commodity, successful wine investment opportunities depend on the quality, the rarity and often the age of the wine chosen. No matter whether you’re a wine lover or not, the fact is that fine wines that are sought after have risen in price over time historically.
In the past, it was common for wine lovers to adopt the approach whereby they bought say 5 cases of a wine with good potential to increase in value. Thereafter they’d ‘put the wine down’ (store it) for say 10 years or so, enjoying the pleasure at that point of drinking a couple of the cases and selling three of them. This would allow wine lovers to earn a sufficient return on the cases they’d sold to let them to repeat the process. For people who were organised, they could do this on a rolling basis over a period of years, enabling them to enjoy seriously good wine at pretty much no cost.
The next stage in wine investment development was that people sought out managed wine investment funds and fund managers made these available. Wine funds enabled people interested in making money from wine to benefit from the potential opportunities without needing to either know anything about wine or to physically buy and sell the wine themselves.
So the bottom line is that people invest in wine, either because they love it and are interested in it on a personal basis or simply want to make money from it. The people who trade on a personal basis typically want to have the fun and pleasure of choosing it, buying it and selling it. The other group of people simply thinks it presents a real opportunity to make money, so they avail of one of the investment funds that are available on the market today.