This post is sponsored by Vinovest. All opinions are my own.
Whether the stock market is currently experiencing volatility or not, a great way to diversify your wealth and investment portfolio is through alternative investments.
Although alternatives have grown in popularity, these options have also become much more accessible for investors to diversify their portfolios than ever before.
Mostly due to financial regulations changing and technology companies looking to shake up the industry.
While investing in stocks and bonds is still a smart decision, building a diversified portfolio will protect you against wild market swings and improve your wealth.
One interesting alternative that is growing in popularity is investing in wine.
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What Is A Wine Investment?
Before I dive into how you can invest in wine, it’s important to understand wine as an investment.
Yes, wine can be a delicious complement to a great meal or even for some social gatherings. However, investing in fine wine has been around for a long time but was mostly considered to an elite group of people or connoisseurs.
However, as the alternative investment movement continues to grow, so do the interests of people looking to diversify their money into other assets like wine.
And the concept and goal of investing in wine is quite simple: you buy specific bottles of wine and then store them for a particular time with the goal to then sell them at a higher price.
But there is an easier way to invest in wine with Vinovest (more one that in some next sections).
Does Wine Appreciate in Value?
Naturally when you go to invest your money, your end goal is to make some return on your investment. So like other assets, wine also appreciates in value over time.
In fact, back in 2003 the Liv-Ex Fine Wine Investables Index was created to track the price of wines and monitor the industry’s leading price benchmarks.
The data was backtracked all the way to 1988 and the compound annual growth rate for the index since then is 12.6%!
And wine performance comes from various factors like scarcity (how rare it is), the aging of the wine, brand equity, and market demand.
The pros and cons of investing in wine
As with any investment, there are always pros and cons. No investment is perfect or comes without risk. Instead, you want to look at your personal goals for investing, how interested you are in diversification, and that the rewards outweigh the risks.
Here are just a few quick insights into the pros and cons of wine investments.
Pros of Wine Investing:
- Diversification from the stock market
- Strong performance in the last 30+ years
- Average wine investment returns over 12%
- Lower correlation to stock market performance
Cons of Wine Investing:
- Choosing wines to invest in is not easy
- Storage issues and knowledge required
- Long-term horizon of investment (10+ years)
- Unregulated market
However, many of the cons when it comes to knowledge and storage have dramatically changed thanks to the platform Vinovest.
How do I Start Investing in Wine?
So now that you know a bit more about wine investing and some of the historical performance of this asset — how do you actually get started? I hinted about that in previous sections, but let’s cover this a bit further here.
Buying bottles and storing
The traditional way to invest in wine is to do the research, buy physical bottles of wine, and keep it stored until they go up in value. As you can imagine, this is not an easy option for most people to do as it requires some knowledge, money, and effort to properly buy and store wine bottles.
Here are the challenges:
- It requires research and knowledge (you can also run into counterfeiting)
- Can require a much larger investment to get started
- Know where and how to buy the right wines
- How you are going to store the wines (your own space, pay for a space to store)
- Knowing when and where to sell your wines
Buying Wine Stocks
An easier option than investing in physical bottles of wine is to buy wine stocks or funds. Many of these may also include other forms of alcohol as well, since there can be many company acquisitions in this industry.
Some stocks include Constellation Brands (STZ), Brown-Forman Corporation (BF-B), and a few others. However, the whole point of investing in wine is to diversify away from the stock market.
So while some of these stocks have performed quite well, you will face stock market volatility and also require research to understand these companies.
The best overall option to invest in wine is to use a platform called Vinovest. Remember when I said that alternative investing has become more accessible thanks to regulations and technology? Well Vinovest is one of the first to make wine investing accessible for everyone.
With Vinovest, you can invest in sought-after wines that historically outperform the market. This requires less research on your part, you do not need to worry about storage, and your investments are fully managed by wine experts.
How Does Vinovest Work?
If you are now more interested in wine investments, then Vinovest is the best option for you. It takes the hassle and challenges out of wine investing and makes the process incredibly easy for you.
Vinovest handles everything from selecting the best wines for investing, buys the wine on your behalf, and stores your wine too. You can then access your wine and performance online or even access your wine in real life at any time.
Here’s how it works.
You can sign-up in a few minutes on Vinovest, which will then ask you some tailored questions about your investment style. This helps the team recommend and pick which wines would be best suited for you.
Here is where the master sommeliers (trained and knowledgeable wine experts) in combination with their AI-driven algorithms select proven and appreciating wines for you to invest in.
The platform is open to both non-accredited and accredited investors, which is great news for anyone looking to diversify into wine.
You can start with a minimum of $1,000 investment or choose their customizable package that offers more options and exclusives, like 1-on-1 expert guidance and access to rare wines. However, the minimum investment for their customized package is $50,000.
After you choose your investment style and fund your account with at least $1,000 — you can view your wine investment portfolio and monitor the current value. You can then choose to buy more for investing, sell your investments, or even physically buy them to drink.
Lastly, it’s important to note that Vinovest charges a 2.85% annual fee which reduces to 2.5% if you invested $50,000+. This is somewhat higher than other alternative investment platforms out there.
However, remember they are buying quality wine investments for you, but also properly storing for you and delivering returns between 10-15% (so far). The costs of investing wine on your own would be much higher, so the fee is quite justifiable.Get Started with Vinovest Here➭
The Pros of Investing with Vinovest:
Investing in wine with Vinovest is the top option right now for those looking to diversify in this alternative investment. Here’s a few reasons why:
- Vinovest is insured with an FDIC equivalent for wine, protecting each bottle against breakage and loss.
- Inspection and authentic review of every bottle by experts.
- Secure and conditioned storage facilities utilized for your wine investments
- You actually own physical bottles of wine, not just shares of something
- You can sell your wine at any time, but the Vinovest experts will recommend optimal times to buy or sell wine.
- Very low correlation to the stock market volatility.
- Open to all investors and can start with a low minimum entry of $1,000. Getting started does not require a massive upfront investment. And the minimum pending your goals, can net you between 45-60 bottles of wine.
What’s cool about Vinovest portfolios is the recommended time horizon is completely customizable. Their algorithm will be able to select bottles for people that want to hold their wine investment for as short as two years or as long as 30+ years.Get Started with Vinovest Here➭
The Cons of Investing with Vinovest:
And with any investment platform, there will be some cons too. However, Vinovest is continuing to improve their platform for investors and they quickly are becoming the leader for investing in wine.
Here are a few cons of Vinovest:
- Vinovest has a short track record as the company was founded in 2016. The good news is their results have been promising since (13%+ returns for investors) and the wine industry has shown tremendous growth results for the past 30+ years.
- Selling your wine can take 4-6 weeks. Although you have options to get your money back, it can take some time to process. Understandable as Vinovest looks for buyers and then will package and ship for you.
- The investment fee is a bit high compared to other alternative investments, although understandable with the costs of storing wine. But for beginners, Vinovest might be a near future investment after you build your portfolio out more.
Is investing in Wine A Good idea Right Now?
As the stock market fluctuates or dips into a bear market territory, having alternative investments like wine is a smart move.
Based on the data that I shared above, you can see that there is a lower correlation between wine and what the stock market does. This is great news as you want your portfolio to be diversified beyond traditional stocks and bonds.
Additionally, with Vinovest you can get started with just $1,000 as a minimum, so you can start off small to test out the platform and wine as an investment.
Personally, wine is another investment option I’ll be dabbling in and thanks to Vinovest, it’s become much easier to build wealth and diversify further.