Well, from here in California, it really feels like the world is falling to pieces. Are you keeping safe and well? Some politicians are in denial of what is right in front of them, it reminds me of the ‘missing the gorilla’ experiment.
On the bright side, at least wine prices are not plummeting like the stock market. If you had the same money in stocks as you do in wine right now you would be down substantially. (Im hoping you don’t) 7.2 trillion was wiped out the stock market in the last month.When we had the crash in 2008, it took the stock markets over 3 years to recover. Just think about that for a moment when your broker tells you to buy the dip…
Wine investment keeps you safe when the stock market crashes.
BUT you need to invest in enough cases of wine to give yourself a good chance of making a stable and decent return. If you’re only focused on selling without replenishing your portfolio its impossible make any kind of return. Because there’s no new wines coming in, to grow your portfolio at different levels.
Sometimes I see wine investors sell more than they buy. This is not growing the portfolio, its actually shrinking it. Drinking it is a different story…
The wine market is expected to do very well following the recent stock market crash. Not immediately, but after a few months as investors try to put money where they feel its safer. Now is the time to invest before the rally starts so you are ahead of the curve. The markets have gone from bullishness to fear and fear is likely to continue with the global pandemic for some time.
But if you are ‘divesting’ (i.e selling off) then you shouldn’t be hoping for too much return from your wine portfolio. Remember growth and wealth accumulation are the key goals.
If you open your wine portfolio and have not made a new investment within 12 months. This makes it very hard for you to see growth in different phases of the market and be able to get in and out at different times.
Your wines may be getting too old for investment, investment wines will out live us but when it comes to making a good return, I would keep a wine 3-5 years as an investment. Then sell it for a younger vintage, regardless of what return it is making for me.
How balanced is your portfolio? Are you heavily weighted in Bordeaux? Or do you have too much Champagne or Rhone Valley? How many wines do you have in your portfolio? You can always ask me to assess your portfolio and give you some advice (And I will not charge you because I’m good like that!)
Every wine investor should have a target of at least 100,000 dollars invested in fine wine. If your portfolio is a long way off this, then its time to start thinking about adding some capital to your portfolio so that you are giving yourself the best chance of success.
Did anyone advise you to NOT put more funds into wine? I expect they don’t know much about fine wine investing if they have.
Has anyone ever told you that you can never have enough of a safe asset in your portfolio?
Has anyone ever told you that wine is a high risk investment? I have proved in the last 20 years that wine is far more stable than the stock market. Stability is the key to long term wealth. Don’t listen to them because they don’t know what they are talking about if they tell you wine is high risk.
A high risk wine investment is buying a 5th growth wine blindly from someone you don’t know and not doing any due diligence on them. The way we invest in fine wine is extremely low risk.
If you have sold more than your portfolio is currently worth. Yet trying to grow a nest egg but you are selling more than you are re-investing then this reduces your chances substantially to grow your nest egg.
Think of it like this, if you don’t plant new seeds in your field as you harvest it becomes impossible to get good results. Hopefully by now you catch my drift…
