Advantages of Wine Investment

The Wine market movement is primarily linked to law of supply and demand. To weigh it out, on the supply side there are exceedingly few Investment Grade labels over the years whose production levels remain fixed or reduce due to the makers meticulous production of Premium Wine. On the demand side there is an ever growing number of HNI’s (High Net Individuals) seeking to own or drink these rare and prestigious Wines. The only way to ease the pressure is for the prices to go up with every passing year.

Investment grade wines are improving assets as with time the wine matures thus increasing its value and price, it is also a tangible and consumable asset.

Wine is a steady investment. In the last two decades Wine has proved to outperformed equity and numerous fixed income indices including FTSE 100 and also other asset classes like Copper, Oil and Gold in the last few years. For long term investors a well chosen and balanced portfolio could easily provide an annualised income of 12 to 15% per annum.

Wine is a less risky asset as it is not as volatile as stocks and shares; moreover it is not highly correlated with the stock market thereby keeping it away from market fluctuations, recession or even interest rate movements which make it a striking investment to diversify a portfolio.

By large, Wine is also considered a wasting asset; therefore it exempts an investor from capital gains tax (However, it is recommended to take advice from your local finance advisor as it is a complex tax law.) Moreover if the wine is kept in Licensed Bonded Warehouses you avoid paying VAT and duty.

Investments in Wine are not time-bound and investors can redeem their portfolio anytime during the tenure.