Alternative asset classes – Investing in wine

What are alternative investments?

Today’s era of investing in equities seems to be all about boom or bust and high-risk high-reward plays. What if I told you it doesn’t always have to be “go big or go home” and a well-diversified portfolio could have exposure to not only assets of various risk, but also of completely different asset classes. This is where alternative assets come in.

Traditional investments like stocks, bonds, equities, and precious metals all have their time and place for being in one’s portfolio. However, as investing becomes more and more accessible to the every day retail investor a whole new world of alternative asset classes have been gaining popularity. Alternative assets usually range from NFTs (non-fungible tokens), collectibles, stamps, and the recently popular idea of collecting and investing in wine. What many don’t know is that fine wine has been the top-performing asset over the last 5 years and has performed well throughout economic uncertainty.

Wine as a stable investment

You don’t need to be a wine connoisseur to invest in this asset class. Although it may seem extremely sophisticated and something reserved only for the elite, investing in fine wines is becoming mainstream and accessible to everyone thanks to platforms like Vinovest. Unlike buying stocks and bonds, when you invest in wine you are actually purchasing a tangible asset. Similarly to how you expect any investment to appreciate in value you are purchasing bottles of wine in hopes to get a return on your investment down the road. Wine is known to have a lower risk profile than equities while offering strong returns. 

Adding wine to a well-diversified portfolio

As with any investment, investing in wine does require some research before you dive head first into the liquid asset, pun intended. With wine, that begins with understanding the dynamics of the investable product. A general rule to remember is that the more rare and vintage wines (less supply) will be more sought after and thus have a higher valuation. Diversification within your wine asset class is also something to think about. Do you want invest in a specific type of wine from a certain region? IE: Are we buying a fine wine from Bordeaux or Napa Valley or are we going with a region that isn’t known for producing such high-quality vintages?

Luckily, there’s an app that takes care of all the complexities of investing in wine for you. From insurance, wine authenticity, and storing the bottles, Vinovest has you covered. Like I said, investing in this alternative asset doesn’t need to be a “scary” thing anymore. In fact, Vinovest’s average client scored a 17.8% return last year. With their slick interface Vinovest makes investing in wine as simple as browsing a catalog and selecting your favorite wines. They also have a “Master Sommelier” feature that combines AI and quantitative investment models to curate your very own wine portfolio, check it out.

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