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I was an absolute beginner and I am not a wine connoisseur but followed the same strategy as ultra-high-net-worth individuals
Wine investment is one of the rich people’s secrets.
With the arrival of the platform economy, it became available for all.
But only a few people know that.
Ultra-high-net-worth individuals invest 5% of their portfolio in so-called investments of passion like art, cars, and fine wine [1].
The price of fine wine investments has grown by 149% over the last ten years [2].
It’s no coincidence that Brad Pitt, Cameron Diaz, Jay Z, Mila Kunis, Ashton Kutcher, and many more own vineyards and market their celebrity wine. It is a lucrative business.
So, I asked myself if it is possible to replicate their investment strategy but with much less money.
You can invest in wine by buying shares of wine-producing or trading companies. Or you can buy a vineyard if you have the needed cash. I do not have that. Or you can purchase fine wine bottles.
Fine wines’ share of all the world’s wine is less than 0.1%. It is a scarce physical asset.
I started investing in fine wine bottles two years ago.
As an ultimate beginner and with no knowledge of the wine market but by relying on experts — and I assume with market luck — I currently have an annualized return of about 14%.
In parallel, I began researching wine investments and how the fine wine market works.
Here’s my steep learning curve.
The performance of wine vs. stock markets
Many comparisons have been made between the return of fine wine and stock market indices.
Wine has a higher or similar return — net of all incurred costs. But it comes at a much lower volatility, i.e., risk of only 3% — 4% compared to more than 15% of stock market indices [3].
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