You may have heard of bottles of wine selling for hundreds of thousands of pounds at auction and wondered whether wine would make a good investment. With the increasing amount of uncertainty in the world combined with the lower returns of traditional financial assets, many investors are turning to alternative assets in the hope they will yield better returns. Traditional safe havens such as dollar and gold have proven to be unstable, and the new market of cryptocurrencies offers impressive profits but also incredibly high risk.
When thinking of long-term investing, many investors are trying to move away from bonds and equities. Real estate, oil and precious metals used to be considered alternative investments, but they are increasingly correlated with traditional assets. This offers little room for diversification, and the need to look for something new.
Wine is a passion for many of its consumers, whether they are regular drinkers or avid collectors. Particularly when it comes to long-lived wine, bottles can be stored for decades so they can reach their full ageing potential. So why not try turning your love for wine into profits? After all, if it doesn’t work out you can always enjoy the bottle with friends. Investing in wine used to be exclusive to the elite, but in recent years wine merchants and online platforms have made this market accessible to everyone. With a small amount of money, you can access this exciting market and watch your investment grow over the years. You will have to be patient, but you may see your money grow significantly over the years.
One of the main attractions of fine wine investing is its tax treatment. With most financial assets, returns are cut significantly by capital gains taxes and investors find themselves forced to turn to riskier investments in order to see a decent level of return. The favourable tax treatment of fine wine investing means that the investor gets to keep most of the profits, which can easily be above 10% per annum. In fact, a professionally selected wine portfolio managed in the correct way can be completely tax-free. Be sure to speak to your accountant or a professional fine wine specialist before making any decisions based on the tax treatment of your investment, as this could be a complex area to manage.
You should also be aware that investing in wine is not for the faint-hearted. You should be prepared for price fluctuations; the value of your bottles will go up and down as with other more traditional financial assets. Furthermore, wine investing is not usually regulated by financial authorities, which means you have little to no protection when things turn sour
Being a wine connoisseur certainly helps, but there is a lot more to wine investing than knowing what good wine is. This is not a fully transparent market, and the right information can be difficult or even impossible to access for an individual investor alone. Making decisions based on poor or misleading information may have catastrophic consequences for your portfolio. The wine market is vast and complex, dramatic changes can happen very quickly and you will have to stay on top of things if you want to be successful.
Wine is a very different asset compared to financial markets. You have to think about proper storage and understand the different valuation parameters and liquidity constraints. This is a world that has to be approached with an open mind and the right guidance from an expert. Before attempting wine investment, it is important that you do your research and get comfortable with the risks involved. Finding a reputable fine wine specialist to assist you in your journey is an important consideration before you start. Your chosen partner should be truly independent and have the required knowledge and experience in order to provide whole of market advice.
Vinadamo is a London based fine wine specialist that believes in providing an honest and straightforward approach to wine investing. The wine market is huge, but that doesn’t mean investing in it should be made unnecessarily complicated. Vinadamo’s expert advisors share their knowledge with their clients as they believe it is important to educate them about the market rather than simply acting as a discretionary portfolio manager.
By using this company, you will get access to mainstream labels and the familiar names of the most reputable wine producers in the world, but also smaller production and niche high-quality wines from all around the world. These can be often bought for a fraction of the price and yield exciting returns if the investment process is thought through thoroughly.
Vinadamo offers a full portfolio management solution to their clients, where the investor specifies their requirements, and everything is managed for them. The company takes time to get to know its clients and their needs and strives to provide a truly bespoke service. Vinadamo believes that wine investing is a long-term game, and it is important to build long-term relationships with its clients and assist them every step of the way.
Wine investing is just the start of the process, not the end. Communication is ongoing and free valuations are provided on a regular basis. Furthermore, the client can request up to date information at any time in order to have full visibility of their wine investments. Transparency is one of the top priorities of the company and it builds trust in its capabilities. Investment ideas are generated regularly in order to keep improving the portfolio and keeping it up to date with changing market conditions.
The company offers an evaluation of pre-existing portfolios as well, providing expert advice on its strengths and weaknesses. Some clients might prefer a more hands-on approach to their investment. They may be expert investors, or simply wish to be more involved in the management of their finances. Vinadamo also offers flexible management options, where it cooperates with the client and provides investment advisory services without full execution capabilities.
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.