Fine Wine as an Investment

The most obvious role of wine in the possession of an entrepreneur would be for entertaining clients, or else for celebrating a good deal concluded, a contract won or just a generally successful day at the office.  But there is another reason why the successful business man or woman might have a ready supply in the cellar and that has more to do with the pursuance of business than with the celebration of it.

Wine of course, as any connoisseur will know, is all about the vintage. A perfect wine from the grape of a perfect year becomes a sought-after commodity, and commodities, as we all know, have an important role to play in the world of investment. Every bottle that is consumed ipso facto makes every unopened bottle of that same vintage a rarer item, and of value to a collector every bit as much as to a discerning palate.

Wine Sensibly Invested Has Returned a Consistent Dividend

Whilst investment in wine is certainly not without risk, many of the pros and cons of investing in stocks and shares are reassuringly absent.  A scarcer commodity should, all else being equal, become a more valuable commodity. The financially authoritative Bloomberg points out that, with suitably expert guidance, investors in wine over recent years could expect a consistent dividend in the region of around thirteen percent. In the United Kingdom the Daily Telegraph has published a helpful list of the top ten performing investment wines between the years 2012 and 2017.

Of course, collecting wine and enjoying it for its intended purpose are not mutually incompatible. Many enthusiasts who invest also share a penchant for partaking of its qualities in a suitably organized environment amongst fellow devotees (visit https://www.nakedwinery.com/Visit/Hood-River-Tasting-Room for a fine example of such an environment). But all the same, as shrewd investors, participants will know what is to be uncorked and what is to be conserved in pursuit of a well-earned dividend.

Most Investors Continue to Maintain a Diverse Portfolio

Despite the relative success of wine as measured against other commodities most investors continue to follow the well-established practice of maintaining a diverse investment portfolio to protect against unexpected twists and turns in the market. After all, investment is about making a healthy return whilst minimizing risks as much as is truly possible.

And it needs to be remembered also that whilst the “increased scarcity equals more value” equation works as a general rule, it is not a guaranteed truism and hanging on unquestioningly to the logic of an adage is no substitute for subject knowledge in the business. Those who trade in wine as a commodity make it their policy to acquaint themselves with as much information about the stuff as they can possibly hold on to.

What is interesting about the wines that make it to the top ten, in terms of their increased value measured strictly as a percentage, is the huge differential between them in the price range. Pricey does not necessarily mean profitable, although in aggregate terms it does usually mean a bigger mark-up.

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