Fine wine investment: liquid assets still a profitable option despite economic climate

The Independent reported this week that low interest rates are encouraging investors to diversify their portfolios with investing in fine wine looking like a profitable option.

“In the last quarter of 2008 we saw a 20 per cent fall in the value of the index,” says Jack Hibberd from (London International Vintners Exchange), a platform that acts as an electronic marketplace for merchants trading fine wine. “Since then, we’ve seen an increase of about 4 per cent, and the market has stabilised.” This is encouraging news indeed when we observe that investing in fine wine can yield high returns over a relatively short period of time. For example, a case of 2000 Chateau Lynch-Bages Pauillac released at £450 in 2001 is currently priced at £1,200.

Even if you have a keen passion for fine wine and consider yourself a connoisseur, it is still advisable to make your investments through a wine merchant as the wine investment market is not regulated. As with any investment, it is important to use reputable wine brokers – you will want to ensure that the company or individual you are using will be trading in several years time. The right choice of broker should also ensure that the fine wine you invest in is stored appropriately (in a bonded warehouse with the correct atmospheric conditions for example) and is insured at replacement value, not the selling price.

It is vital to do your research and rest assured that you have made an informed decision. Here at Provenance Fine Wines we specialise in managing portfolios of superb quality wines, produced by some of the most highly regarded vineyards in the world. Our main aim is to assist our private clients in achieving their fine wine investment goals, mainly by offering the right wines at the right price at the right time.


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