Fine Wine – An Investment for the Future
Due to the long-term investment period and incredible profitability of fine wines, adding these assets to your portfolio today can prove to be a security blanket for your old age and retirement – very similar to a pension plan. Furthermore, if the returns don’t exceed all expectations, possession of a premier case of Bordeaux wine will always yield immeasurable pleasure if not profit.
Wine and Pension Plan – How?
It is no surprise that fine wine assets are a medium to long term investment. Although short term gains are possible with luxury wines, the true profitability of fine wine can be maximized using an intelligent, long-term investment strategy. Investors can hold cases of top wine for several years, even decades, as time works in favor of these luxury assets; maturing the wine to perfection, as well as increasing its value over time as the rarity factor increases. For this reason, many investors are aiming to use fine wine like a pension plan in their financial portfolios; investing in several cases of top Bordeaux wine today, and cashing in several decades later.
The Long Term Fine Wine Investment Plan
What makes a fine wine portfolio like a retirement plan? There are several factors that highlight the benefits of investing in fine wine over the long term. First of all, the supply and demand metrics of luxury wine can explain the significant value increase, especially over a 20-30 year time frame. Bear in mind that the top Bordeaux wines are only produced in limited quantities, as regulated by the governing authorities in Bordeaux. As the years go by, inevitably cases of wine are cracked open, bottles are enjoyed and the already minute supply can only further decrease- propelling the demand for these wines further. As we only deal with the most highly rated fine wines in the world, there is no question of demand; in fact, the liquidity of the secondary wine market is immense. These premier luxury goods can be sold at any time, in any currency, across the globe, with the right contacts and industry connections. Secondly, fine wine assets are a tangible asset. Whether you store these luxury wines in your cellar (not recommended) or in a bonded, fully insured warehouse (crucial in retaining investment value) you will always be in possession of a material asset – a case of the world’s finest wine. Furthermore, the performance history of fine wine is irrefutable. Taking a look at 20 to 30-year performance charts of the top wines shows a jaw-dropping increase, sometimes of over 5000 %! Take for example the Chateau Lafite Rothschild 1982; release price of 300 €/case, now 30 years later the value stands at an incredible 40,000 €/case. Below we have detailed 3 wines and their value increase over the last 20-30 years. For comparisons sake. There is a good reason why top financial associations like Bloomberg, Coutts and the like are slowly picking up on this alternative investment.
An Investment for the Future
As one can see, an investment in fine wine can be a great security blanket for the future. The stats clearly demonstrate the long-term lucrative nature of this alternative investment, and factors like rarity, liquidity and tax-free profits simply make this a mouthwatering prospect for savvy investors and wine connoisseurs. Especially if you enjoy top Bordeaux wines; start your fine wine portfolio today and you will reap the benefits in the long term.
Bordeaux Traders - The Fine Wine Investment Brokerage GmbH
Kaerntner Ring 5-7, 1010 Vienna
Phone: +43 1 20511 60 1241
Fax: +43 1 20511 60 1008