When most people think of investments, they typically think of trading stocks and shares on the stock exchange – and this is the form of investment that most investors tend to engage in. However, if you are looking to diversify your investment portfolio or make a start in investing in something of a different way, there are some great options open to you.
One of these is wine investment. The wine market is currently much more buoyant than the economy more generally, so even though the market did suffer something of a fall last year, it has recently picked up again and is still up more than 50% compared to where it was in 2007. This means that now could be a great time to get started in wine investment.
The market on which wine is traded is called the Liv-ex Fine Wine 100, which tracks the value of the 100 most sought after wines in the world. Wine is also typically thought of as a safe haven in times of economic trouble, which is one reason the market continued to perform well even as stock markets around the world have significantly struggled over the past few years.
One important thing to note about wine investment is that fine wines are a finite resource – each chateau only produces a certain amount of each vintage, so even though new wines are coming onto the market all the time, ‘classic’ vintages are still highly sought after. This helps to drive the price of the wines. For example, in 2009, a record number of Bordeaux red wines were awarded the highest points possible, something that will make these wine hugely popular to investors in years to come.
Essentially, this means that these wines were awarded 100 out of 100 in accordance with the wine scoring system. This system was developed in the 1970s by a man called Robert Parker, and it intends to measure the quality of fine wines. As you have probably already guessed, it is the perceived quality of wine that has a huge impact on its market value.
Typically, wine that is suitable for investment has to have a score of at least 95 out of 100, so this is something to keep in mind when you’re just starting out. Overall, wine investment can be a risk just like any other form of investment, but it is also a very interesting market with good signs of growth that suggest it could be a good investment vehicle for anyone looking to move away from traditional stocks and shares.
Content written for fine wine investment brokers, Vin-X. http://www.youtube.com/watch?v=IdzyrSXeyeA&feature=related.
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