Alternative Investing like the Rich: Wine Bottles

The market for wine is really taking off right now. But it is still in its infancy, with plenty more room to grow from exploding demand. People are not just buying wine to drink, but also as an investment. The premise: buy wine when it’s young, and then sell it once its matured and grown in value.

Alternative Investing: Wine

According to Liv-ex, 2021 and 2022 were the best year ever for wine investing. In fact, in 2021, someone spent a million dollars on a bottle of 2019 Cabernet Sauvignon from California, making it the most expensive wine ever sold at an auction. Bear in mind that this was a huge 6-litre bottle, but the record counts.

Alternative Investing: Wine Liv Ex
Screenshot from Liv-ex report

Because fine wines are made in such small amounts, the increasing demand for the asset class is driving prices higher and higher. Another fact: in 2021, fine wine turned out to be a better investment than stock indices like the Dow Jones and the S&P500.

But, you are probably interested in the long term view of this investment too, as you should be: You will be glad to know that fine wine investing has achieved an amazing 10.6% annualized returns over the past 30 years.

Will the good times continue?

No one has a crystal ball, but the future does looks promising for wine investing. The US has recently removed tariffs on European wine imports, so American buyers are expected to demand a lot more fine wine. Wine from places like Bordeaux, Phone, Burgundy, and Italy are particularly appealing to wine investors so keep an eye on these varieties.

Alternative Investing: Wine

There are also companies like Vinovest that have emerged in the past few years that are making it easier for everyday people to invest in wine, again increasing demand for an already scarce product.

Even if you don’t have a lot of money to start with, you can get start investing with a minimum deposit of $1,000 on Vinovest/ Whiskyvest. Also, you can claim a $50 bonus when signing up via the link below.

Need more reasons to invest in wine?

Well, apart from the chance to make some money, there are four other pretty good reasons to consider:

  1. Diversification: Fine wine doesn’t usually follow the ups and downs of regular financial markets. When stocks and such take a hit, wine investing can help spread out the risk in your entire investment portfolio. For clues as to what percentage wine should be of your entire portfolio, Liv-ex reports that wine makes up around 2% of the world’s wealthiest people’s riches.
  2. Tangibility: Physical assets like wine, art, and gold can feel like a safe bet when times are uncertain. Stock markets can crash, but real things don’t just disappear (unless, of course, you drink them!).
  3. Taxes: Because it’s a “wasting” asset – something that doesn’t last more than 50 years – wine can be exempt from capital gains tax (though this depends on where you live). So, you can potentially pocket more of your gains without worrying too much about taxes.
  4. Enjoyment: Beyond being a solid investment, wine investing has another perk: you can actually enjoy it! It’s pretty common to buy a few cases to drink and then maybe sell some later if you want.

Check out Masterworks, Public, and Yieldstreet and explore Art Funds that let you purchase shares in million-dollar paintings from blue chip artists like Banksy, Kaws, and Yayoi Kusama.

Read more: Review: Masterworks vs. Yieldstreet
Read more: Review: Masterworks vs Public

We welcome you to Contact Us with any questions you have about investing in art. Let us know your budget, the kinds of art that interest you, and we can work out a plan to get you started with art collecting the right way.