The two great preoccupations of the modern man are business and pleasure. And they don’t always see eye to eye. So it’s nice when something comes along that marries these disparate worlds in beautiful harmony, and tastes pretty good to boot. To invest in wine is to have your priorities in order. Yes, it’s nice to make some money now and again. But it’s more important to appreciate life’s ephemeral pleasures, particularly the ones that can’t be expressed in a bank balance. Still, if the mystique of an unearthed case of Margaux isn’t enough to swing your dial, there’s also the hard business facts. Here are the six reasons why wine might well be your best investment decision of 2018.
It’ll almost certainly outperform the rest of the market
Fine wine investment has produced positive returns in every five-year holding period since records began in 1999, and outperformed 98% of investment-grade asset classes over the same period. This miraculous performance is due to the relatively small quantities in which the most exceptional vintages are produced, and the demand-supply imbalance at the very heart of the market — as more and more of each year’s crop is glugged down, any bottles left in storage grow exponentially in cachet and value.
It’s a tax free investment
Unlike many other asset classes, fine wine is never subject to capital gains, income or inheritance taxes. Its status as a “wasting asset” means you’ll also never pay tax on the profits you make from sales. Like a lingering Chambertin, this leaves an indescribably lovely taste in the mouth.
It’ll help diversify your portfolio
Unlike other investment classes, luxury products like wine are rarely at the mercy of the slings and arrows of geopolitics. In fact, due to wine’s super premium cachet and its traditionally wealthy investor pool, its value often continues to appreciate even during market turmoil. A wine investment is thus a neat addendum to a more traditional portfolio, and one that may make all the difference in this increasingly unstable global climate. If in doubt, reach for the bottle.
It’s infinitely more interesting than any traditional investment vehicle
Turn to your neighbour at your next dinner party and tell him about your diversified equities portfolio and you’ll soon leave him snoozing in his vichyssoise (if the host doesn’t skewer you with the carving fork first.) But spill the beans on the gorgeous collection of Bordeaux first growths and Super Tuscans left in the safe hands of Berry Bros. & Rudd, and you might find yourself with a new best friend by the time the pâté hits the table, and three wedding invitations before the evening is out.
Investing in pleasure pays for itself
The old saw in wine buying is that you buy two cases, drink one now, and lay down the other case to maybe sell on later. But with increasingly sophisticated methods of storage investment now available to even the most amateur wine investor, drinkers the world over are re-thinking that strategy. With services like the Berry Bros. & Rudd Cellar Plan, for example, many investors are buying two cases now, holding on to both of them in the security of the Berry Bros. vaults, drinking one a little way down the line when it has blossomed to maturity, and then selling the second at such a whack so as to cover their initial outlay.
Furthermore, if you’re curious as to where to begin your wine investment, Berrys’ Broking Exchange (BBX) is the world’s most exclusive and extensive fine wine marketplace for private individuals. It is a unique trading platform, which provides access to bottles and vintages which, quite simply, cannot be bought anywhere else.
When all’s said and done, you can always drink it
Some pleasures can’t be contained in a spreadsheet. The joy of wine is one of them. If you choose to invest in wines that you cherish and adore, then your pleasure will be guaranteed, regardless of financial performance. If it all comes to naught – and that bottle of Screaming Eagle plummets desperately in popularity and price – at least you’ll have something nice to serve up with the beef Wellington. And you can’t say that about a mortgage-backed security with collateralized debt obligations.