Wine investment: What to look out for and how much you'd need to start
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Wine investment: What to look out for and how much you'd demand to outset
More Singapore investors are putting their money in wines. But before you take the plunge, there are some vino investment fundamentals to be aware of.
(Photograph: Kym Ellis / Unsplash)
12 Dec 2022 06:31AM (Updated: 04 Jul 2022 10:18PM)
From the scores of wine retailers that be online and offline to the numerous wine appreciation workshops and masterclasses, and the multitude of blind tastings and vino weekend events, it'south articulate that Singaporeans' thirst for wines is growing.
But there's some other side of wine that novices and coincidental drinkers might be oblivious to: Wine investment.
Since establishing their headquarters in Singapore in 2014, wine merchant and luxury lifestyle service provider Sarment has seen an increasing number of local clients investing in wines. "Our clients understand that financial returns are generally quite stable right now and wine investments give greater returns," said Julien Drevon, general director of Sarment Due south East asia.
"Passion investments like wine complement their lifestyle, and different stocks, vino is something tangible that you tin can really bask if you want."
UK-based wine investment house Cult Wines opened an office here in October to cater to this niche but growing market.
Said Cult Wines' SEA (Southeast Asia) Associate Sales Director Nicolas Laurent: "Well-nigh of our wine investors normally have no knowledge near wines. They came to us because they heard that wine is a safe alternative investment producing good returns. Just [later], they were happy to learn about the wines on their journeying. We organise visits to the vineyards, masterclasses, wine dinners with producers and winemakers, critics, and Masters Of Wines certification."
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HOW TO START INVESTING IN WINE
There are a couple of ways to invest in wine. The get-go choice involves purchasing and reselling individual bottles or cases of particular wines.
The 2d is to purchase shares in a fund that specialises in wine investments – like a common fund, except with a portfolio of wine bottles. The type of portfolio y'all have depends on your capital budget, investment level, investment term, and take chances appetite.
This is where firms like Cult Wines comes in. The business firm's portfolio direction service is intended to be a leg-up compared to the services offered by wine merchants and distributors hither, which may provide varying degrees of investment advice.
While there is no minimum investment capital to use its services, Cult Wines advises clients to start with at to the lowest degree £10,000 (South$17,500) and top up whenever they desire to add to their portfolio. "Ideally, £50,000 gives one access to 30 to 40 lines in your portfolio to offer diversity," said Laurent.
He explained: "We purchase, concur, and so sell afterward 1 to three years. If, at any point, you need your cash back, we tin can liquidate a portfolio of £l,000 in six to viii weeks. Since we started to track our performance in 2009, we have returned an average of thirteen.ix per cent annually."
Like financial fund managers, advisers at Cult Wines examine their clients' portfolios on a daily basis to take advantage of whatever sudden and short-term trends.
For instance, the Chateau Margaux 2022 was ane of the all-time vintages the estate e'er produced, and was the last vintage under the auspices of the tardily Paul Pontellier, the estate's longtime managing managing director.
Since we started to track our performance in 2009, nosotros have returned an average of 13.9 per cent annually.
The wines were get-go put on the market in May 2022 and the Chateau announced they were going to release a special edition of the vino, ane with a black glass bottle and silver engraving. "Before they announced that, the vino was trading for £4,500 for a case of 12. Then, in a span of four weeks, it went up to £13,000. When it reached £11,000, we advised our investors to sell and reallocate the turn a profit to reinvest in something else," Laurent shared.
As with any investment, there are risks and pitfalls involved. Laurent shares a few tips to take note of when dipping your toes into wine investment.
ane. THINK WITH YOUR LEFT Encephalon
Be ready to invest in wines that might non accommodate your tastes. The types or brands of wines that you like may not ever be the ones that provide the all-time returns. Bear in listen that you are ownership wines to invest, non necessarily to consume.
2. ENSURE THAT YOU'RE THE RIGHTFUL Owner
Always make sure that yous are the sole legal owner of the underlying nugget. In the consequence of, say, the closure of your wine-investing house; having ownership of the wines ways you can go along to broker them.
iii. BE AWARE OF WINE'S LIQUIDITY AND VALUATION
As an investment, wine is not every bit liquid equally the stock market, but is definitely more liquid than existent manor and culling assets similar art. Cheque with your portfolio manager how rapidly you tin can exit your investment. Keep abreast of your wines' valuation by following the London International Vintners Exchange (Liv-Ex).
4. DIVERSIFY
A diverse wine portfolio spreads risk and tin as well maximise returns. Complement blue chip wines like Bordeaux Commencement Growths Chateaux Lafite Rothschild, Mouton Rothschild, Petrus, and Haut Brion with emerging stars from Burgundy, or perchance, even estates in Italy and California.
5. IMMERSE YOURSELF IN THE World OF Wine
While you do not need extensive wine knowledge to showtime investing in wine, it is benign to learn more most it. Subscribe to fine wine merchants' newsletters, follow wine critics, take educational wine courses like the Wine And Spirit Pedagogy Trust or WSET, and, if all else fails, just observe a nice wine bar where you can appreciate and discuss wine with like-minded individuals.
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Source: https://cnalifestyle.channelnewsasia.com/dining/what-to-look-for-when-investing-in-wine-making-wine-investment-238816
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