Why there’s no better time than now to invest in fine wine
It’s high time to invest in fine wine. Recent statistics show the fine wine market is performing as well as ever, making 2018 the perfect year to begin building your wine portfolio.
Wine has long been the most stable investment you can make. According to research by Credit Suisse, it has outperformed traditional investments like property, art, and gold for the last 118 years. With a 3.7% year-on-year appreciation, it significantly bettered housing’s 2% real capital gain over the same period.
With the fine wine market continuing its long term success, and the poor showings of other traditional investment markets, there really is no better time for you to invest in fine wine.
Fine wine is naturally a safe bet
Factors like the small quantities of exceptional vintages produced and the market’s inherent supply-demand imbalance make wine a naturally safe investment. These constants have played a huge role in fine wine’s long term success. As more of each year’s crop is drunk, any bottles remaining in storage become rarer and grow in value over time. Owners can simply sit back and wait for their wine to accrue worth. A 244 year old wine recently sold for a record €100,000. That said, as wine investment experts London Wine Cellar point out, older wine is not necessarily the most valuable. Factors including the land the grapes were grown on and how it was stored are also exceedingly important.
The fine wine market has had a stellar year
Fine wine’s long term performance shows no signs of stagnation whatsoever, and 2017 was another stellar year for the market. According to Cult Wines Ltd’s Fine Wine vs Global Equities report, the Liv-ex 1000 index—the index tracking the performance of 1,000 leading fine wines on the secondary market—performed better than the FTSE All Shares index and gold futures in 2017, rising 11.3%.
This performance was largely down to increasing interest from outside of Bordeaux in places like the USA and Italy, plus a returning appetite for wine investment from the Chinese markets. This broadening of the market is expected to continue in the future, with Liv-ex predicting that regions such as Brunello in Italy, and Napa in America will trade an increasing number of wines. They also believe they’ll be growing interest from emerging markets like Mexico, Southeast Asia, and parts of Africa. The booming state of the fine wine market makes it the optimum time to jump in yourself.
Other investment markets are seeing periods of instability
Not only is the fine wine market currently seeing a period of real success, but other traditional investment markets are floundering in comparison. The British slang phrase “safe as houses” was coined in reference to the supposed security of investing in property, however, this belies the property market’s current instability. According to the Office for National Statistics, the UK’s annual house prices are rising at the slowest rate for nearly five years, with the falling value of London properties particularly worrying. Experts have warned that making profit from London’s investment scene is ‘increasingly difficult’, and the nationwide market’s stagnation does not bode well for investors.
The story is the same for other traditional investment markets. Whilst the worldwide art market reversed two years of decline to see a growth in turnover in 2017, experts are warning that it is becoming too ‘top heavy’ and pricing out the majority of investors. Art selling for over $10 million at auction saw a 125% rise in total sales value in just a year, meaning just 1% of the artists featured at 2017 auctions accounted for almost two thirds of total sales. With the fine wine market going from strength to strength, it makes sense to invest in this market ahead of those not offering the same high chances of success.
With the ever increasing value of wine, and the poor performances of other investment markets in comparison, there really is no better time than now to invest in fine wine.