Can expensive wines and whiskeys truly diversify an investment portfolio?
Investing in stocks has always been a great idea; but then again, not everyone can afford to spend money on stocks. As for bonds, some people find them too risky. What about gold? Is gold just as challenging? If yes, what’s left for us to do? How can we diversify our portfolio without taking huge risks, and without losing our initial investment?
Wine & whiskey – excellent alternatives
In the recent years the value of some wines and whiskey types has skyrocketed. An increasing supply is targeting avid collectors from around the world, particularly in Asia where prices have become incredibly competitive. Believe it or not, expensive and qualitative whiskeys and wines might be an excellent investment idea. However, even if these assets have great potential, financial experts are advising investors to take caution. The industry of fine beverages might seem like a dream come true; but there are risks you must learn to steer clear of. Counterfeit wines and buyers without a proven record in these industries are messing with the credibility of real collectors and investors.
Remember that you’re investing in wine to make a profit; although if your product becomes vinegar, nobody’s going to pay $1,000 a bottle for it. It’s all about origin and provenance. Adequate storage conditions and constant monitoring of your cases are vital aspects you need to take into account if your want to make money with wine or whiskey.
Get to know the market
Rumor has it that if you want to make money with alternative investment ideas like whiskey or wine, you need to put down a small fortune. That’s not always the case. Wine advisors target connoisseurs eager to purchase a good-quality product for their own pleasure; merchants on the other hand, target small investors looking to enter this business. But then again, only the best and most renowned merchants can persuade a newbie investor that this alternative asset has potential. Over the years, many people who invested in wine failed and the reasons might surprise you. They didn’t hit rock bottom because the product was bad; they hit rock bottom because they didn’t took the time to assess the market.
How should investors get started in the whiskey and wine industry?
Both wine and whiskey investments come with great risks. For starters, we’re talking about beverages that are extremely susceptible to fungus, bacteria and mold. If they’re not stored properly their value decreases. Worst case scenario, rather than make money through sales, you end up drinking your investment. Experts agree that it’s challenging for someone who doesn’t love whiskey or wine to make a profit in this industry. Prices have increased tremendously over the years; which means it’s getting tougher and tougher for someone new to find a good bargain.
When it comes to fine wines, it’s best to keep your eyes on Bordeaux, Super Tuscan and Burgundy varieties. Red wine in particular, gets a lot better with age than white wine. As for whiskey, things are a little bit different. As opposite to wine grapes, whiskey grains are more versatile. Whiskey ages in a cask, while wine ages in bottles. Furthermore, prices for whiskey bottles are more stable, thus making it difficult for investors to spend less and earn more.
Bottom line is there’s money to be made with both wine and whiskey. All you need to do is know the market before spending any money; if you’re a wine or whiskey aficionado and you enjoy both, then that’s even better. Your chances of success automatically increase when you truly like a type of asset.