Investing in wine is a good option as there are many advantages to such an investment. Still, you should be aware of some common pitfalls to protect yourself. We will explore the pros and cons of investing in wine in the next article.

Advantages:

i) The return on investing in wine can be exceptional compared to other types of investment products that most people traditionally invest in. Investments in wine can typically return up to 30% per year. Also, wine investments have consistently outperformed the stock market for about 3 decades (which is honestly not saying much).

ii) Investments in wine can be good for both short-term and long-term investments. Short-term investments can be as short as one year, and long-term wine investments span a period of about five years. Investments in wines are also covered because the supply decreases and keeps increasing while the demand keeps increasing constantly.

iii) Wine prices do not fluctuate much as they are backed by a non-speculative market and therefore not as volatile as the stock market.

iv) You don’t have to be an expert to invest money in wine. A good trader will be able to advise you on the correct type of portfolio that he should hold in order to see profits.

v) You can easily sell and profit from your wine investment with ease. This amount of liquidity may not be available in other types of investments.

Cons:

i) You should go with a good company that can offer you free advice on what portfolio to build. If you are misled or cannot get this information, you could end up losing money.

ii) Unless the company offering wine for investment gives you free storage up to a maximum of 5 years, you should not accept the deal. Storage costs must be included in the price, or else you lose money. Think about the total cost of the investment.

iii) Most wines apart from Bordeaux wines can be a risky investment. But if you invest in Bordeaux wines, you can safeguard your investment, as almost 90% of wine investments gravitate towards Bordeaux wines.

iv) You must be able to personally visit the bonded warehouse of the company that stores the wine for you. If this is not possible, then your investment could be risky. So look for a company that provides this service.

v) You should be able to plan an exit strategy where you can cash out within 5 years. Anything longer than a 5-year period is not recommended.