Good wine is increasingly a sound investment – Robb Report

The number one rule of investing is not to lose money – “buy high, sell low” is rarely the route to financial success. This is, according to one investment strategist, what makes the fine wine market a safe and ideal space for investors looking for stability in their portfolios.

“Historical studies have shown that the value of good wine will always appreciate above the rate of inflation,” says Tom Gearing, Managing Director of Cult Wines Asset Management, one of the leading investment companies in the wine industry. wine to the world. “Beyond its intrinsic value as a passion asset, good wine can have a stabilizing effect on investors’ portfolios because its performance is not correlated with volatile stocks.

Gearing, finalist in the UK edition of The apprentice in 2012, predicts that the global fine wine market will soar as growing wealth in Asia-Pacific drives increasing demand for an asset with limited supply.

“Southeast Asia and, of course, China are two of the regions that at the moment are pursuing a strong upward curve in terms of education and wine consumption. And this is not a short term lead. This will certainly continue for a long time, ”says Gearing.

Tom Gearing of Cult Wines Asset Management

Photo: Courtesy of Cult Wines

Growth in less obvious emerging markets is also fueling the surge in wine investment. Gearing recounted a recent conversation he had with Jean-Guillaume Prats in which the CEO of legendary Bordeaux producer Château Lafite Rothschild was downright stunned by the prospects in markets such as Mexico and Nigeria, where there is a growing interest in luxury spirits as well as in wines.

And don’t forget the good old United States of A. With California wines starting to take their place alongside the best old world vintages, the opportunities for U.S. investors have never been greater, according to Gearing. For nearly five years, the American Cult Wines Asset Management index, which represents 10% of the company’s global exposure, performed in the top three sub-regions of the company’s assets, alongside Burgundy and from Bordeaux. The gear sets the return of the U.S. index at 62% over the period from November 2013 to May 31, 2018.

Right now, most investors in the US are focused on the more established wineries and brands – classic Napa Cabernet Sauvignon – which have a bit more recognition and liquidity in the international market. Some of the emerging regions that produce excellent wines, such as Oregon and Washington State, from pure investment, have not performed as well as Northern California. . . again.

“Screaming Eagle, Opus One, Dominus and wines of that nature are already very well positioned in the wine collector market,” says Gearing. “But keep an eye out for mulled wines from other parts of the United States, because they’ll get there sooner rather than later. “

Gearing warns that there is no guarantee that global demand for fine wines will double, say, next year. It may take five years, maybe more. “No one can say for sure when this will happen, but he will be happen, ”Gearing says. “And that is what is so exciting about good wine from a bettor point of view.”

About Michael Brafford

Check Also

New Mexico House Approves Sweeping Revision of Liquor License | Legislature | New Mexico Legislative Session

Country united states of americaUS Virgin IslandsU.S. Minor Outlying IslandsCanadaMexico, United Mexican StatesBahamas, Commonwealth ofCuba, …