Wine Investment / Why Invest in Wine
Why Invest in Wine
Why and how investing in fine wines can be highly beneficial is a popular query for investors looking to step into the fine wine market.
As it has been proven, wine investments are consistently outperforming traditional investments such as stocks/shares, real estate and commodities (even Gold) with higher returns alongside relatively low risks.
The crucial advantages of investing in fine wines:
Investing in Wine is Stable
In the current climate of economic concern and financial downturn, fine wine prices remain consistently steady. Unlike the stock market or property market, wine investment in 2014 is not dependent on economic conditions or interest rates.
The fine wine industry is currently booming. These blue-chip wines have consistently outperformed most assets over the past 20 years and are continuing to do so. The average annual return can be as high as 5% – 15%.
Tax Free Investment
Fine wine is a 100% tax free investment. This means you will never be subject to any capital gains, income or inheritance tax. Best of all, your profits are also completely tax free. In addition, if your investment wine is kept ‘in bond’ you will not have to pay VAT (Value Added Tax) or duty either.
Demand and Supply
One of the greatest advantages of investing in wines is that supply of any given stock is finite. The combination of an increasing global demand and decreasing supply makes fine wine such an attractive proposition for investors.
Hedge against other Financial Securities
In definition, a ‘hedge’ is an investment that is taken out specifically to reduce the risk in another investment. Whether your portfolio entails equities, bonds, properties or commodities, a well-diversified portfolio containing fine wine offers maximum risk-adjusted returns.
Personal Ownership of a Tangible Asset
Wine is a tangible, transportable and consumable asset. Invoices, payment receipts and bonded warehouse accounts all certify the exclusive ownership of your investment wine. Just like with real estate, you – the investor, will always be the full owner of these investment wines. Therefore it is known to be a tangible asset.
Luxury offers Protection against Inflation
Luxury products are not prone to market turbulences, as the wealthy and prosperous are not necessarily affected by financial uncertainties. Similarly for luxury wines that offer investment value, demand will always be maintained. Even during market turmoil or declining financial markets, these high-end luxury wines continue to appreciate in value.
Depreciation – still a treasure
At Bordeaux Traders we place great importance on achieving the highest possible profits for our clients and strive to commit their assets sensibly. Just for your kind information however it may also be of interest to know that at the end of the day, it is your wine – maybe even to drink. So if one or two cases paid for themselves through strategic investing, then you may also wish to one day taste one of the most exclusive fine wines in the world yourself.
Any investor looking to add a competitive edge to their investment portfolios should consider diversification through fine wine. Intelligent selection backed by a thorough understanding of the fine wine market can lead to astonishing returns. For this very reason along with the aforementioned benefits, there has been an explosion in popularity in fine wine investments over the last decade.
Further reading on wine investment
Is investing in fine wine really tax free? Are investment wines exempt from income tax and capital gains tax? These are some of the salient questions posed by savvy investors when dealing with investments in luxury wines.
Timing is absolutely crucial – in life, as well as in the arena of financial investments. As mentioned in previous articles, the fine wine investment market is steadily moving into the mainstream of alternative financial investments.
Gone are the days where a Hugo Boss suit and Rolex timepiece would propel your perception in the public eye. Even a Ferrari in the garage no longer carries as much status as it once did; however, top class luxury wines are slowly becoming a status symbol for the wealthy and...
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