In Vino Divitiae
This twist on the common Latin phrase in vino veritas means “in wine there is wealth.” If you’re looking to add to your investment portfolio, fine wine can be an attractive option as an alternative asset. The wine market offers a promising future with more people interested in buying and drinking wine. Additionally, over the past fifteen years, wine investing has often beaten global equities and has consistently outperformed the S&P 500 for the past 30 years.
Just as with choosing stocks to diversify a portfolio, diversification is key when investing in wine. When selecting wines for investment, it’s also important to target investment-grade wines rather than more common and less expensive bottles. There are many factors to consider when evaluating bottles of wine to purchase as an investment, such as:
- Reputation and track record of the producer, vineyards, and varietals
- Vintage – impact of the harvest year and its weather on wine quality
- Aging potential, influenced by grape type, tannins, and acid levels
- Scarcity and price history – limited production can drive up prices
- Market trends and pricing at auctions
- Recommendations and ratings by wine critics
Wine can be a complex asset so investing requires a solid base of knowledge, diligence, and a commitment to staying informed. Resources like Wine Spectator and The New Sotheby’s Wine Encyclopedia are valuable references.
Wine investment can be made by purchasing via the primary market, where wine is initially sold from producers to consumers through wholesale distributors or the secondary market which involves the sale of wine through auction houses like Sotheby’s and Christie’s, as well as online auction houses like Crurated and Winebid, wine exchanges, and wine brokers. Rather than buying wine bottles, you can also invest in the wine industry itself by purchasing stocks of companies that are wine merchants or producers.
While it’s fun to learn more about appellation and aging potential to purchase by the bottle, there are also ways to invest that don’t require you to be a wine expert and don’t require you to worry about where to store your collection. There are several dedicated platforms, like Vinovest, that cater to investors interested in wine. This combines the ability to invest in bottles of wine and build a diversified portfolio with the benefit of having wine experts handling most of the curation, so you don’t have to do the research and legwork. The bottom line is that wine can be a lucrative alternative investment and a welcome addition to your portfolio even without you owning your own cellar.
