According to the 2022 Knight Frank Wealth Report, 2021 was a good year to invest in wine. Investments in fine wine, they say, delivered an average return of 16% over the year – with an average growth of 137% over the last 10 years.
Wine is defined as a passion asset: a non-traditional investment that reflects your interests, and whose ownership can be enjoyed while it’s in your portfolio. If you’re passionate about wine and are considering making it part of your investment portfolio, here’s how.
Three ways to invest in wine
There are three main ways of investing in the wine industry:
- Buying bottles. Choose a good, premium wine, and you may be able to sell it at a profit once you’ve stored it for a few years. In this situation, you’ll need to know which wines are likely to increase in value. However, that’s not all: you’ll need to ensure that you store it in the right place, in the right way.
Some wine investors work with experts to ensure that their investment is being stored correctly and has the right insurance. These specialists can also advise you on the market, as well as managing the sale of your investment when the time comes.
- Buying a vineyard. Of course, this will require both a greater initial investment and continued investment throughout. However, with the funds, the knowledge and the right team – as well as the right growing conditions – there is the potential for a steady income over time.
- Investing in wine-based stocks or funds. If you are passionate about wine but dont have the funds to buy a vineyard – or the storage to invest in individual bottles or cases – you could consider investing in individual wine companies or wine funds. This could be a good option for those who are knowledgeable about the industry and enjoy staying up-to-date with wine industry developments.
Investing in a passion asset, like wine, appeals to some as they have the ability to combine a passion with the potential for decent returns. However, as with any investment, these things may take time: and may depreciate, as well as increase, in value. With fine wines growing in value over the last 10 years, is this a sector that could be right for you?
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