Talk of the moment is most certainly all about wine and its purpose as an asset class, with plenty of wine investment funds popping up (mainly in the UK but also) globally. Many act as if they are normal wine merchants selling you wine but in this case of Investment quality. Others are more like hedge funds where you place your cash and wait for the company to make returns. Wine Investment is the new buzzword, made only worse by the recent series of THE APPRENTICE on the BBC.
One can track the price of various wine on the much vaunted http://www.liv-ex.com and even pay a fee to have your own wine cellar evaluated.
I’m making this sound all negative, and I won’t lie, I have made my fair share of money from buying wine and watching the price rise to the point where I have sold the wines at a considerable profit, but I have always chosen which wines to purchase based on a very different criteria and reasoning to most of those who really invest in this tangible asset for a living. In fact, my views are very similar to those of Joe Roseman, a friend and analyst who has recently written and had his book published.
Joe has coined the term SWAG (silver, wine, art and gold) as the future of having a secure part of one’s investment portfolio that is likely to ride out and outperform all the other more traditional asset classes. His view of wine can be found to be more akin to the traditional thought that it is not an asset class to flip as soon as possible like stocks and bonds but to sit and hold onto for the medium to long-term.
My own view is to purchase wines that people are willing and able to drink (from within the fine wine class), and I don’t mean Blossom Hill. ;-) Thereby sitting on them until they are ready to drink. In fact, I advise people to buy what they would consider drinking themselves, and pretend to be pleasantly surprised when the prices have risen… if all else fails, you will never have to spend any money to drink wine ever again if you have put aside enough cash if the boom ends.
Of course, Joe advocates having a wide and varied portfolio but he believes that if you plan for the long-term rather than going on the latest whims of what may or may not be going on in the Far East, one can all but guarantee that you will receive good returns on your investment.
The book is now available on Amazon, and more information can be found on http://www.swaginvestor.co.uk
Until next time: