With wine continuing to gain popularity as an alternative investment, more investors in the US are looking to add fine wines to their portfolios in 2020. Wine investment provides portfolio diversification, inflation hedging, and potential high returns. However, navigating the complex wine investment landscape can be daunting for novice investors. Choosing the right wine investment platform is crucial to succeed. This article explores the top wine investment platforms in the US for 2020 based on fees, inventory, storage solutions and more. By understanding the key factors in evaluating wine investment platforms, investors can make informed decisions to pick the best option for their investment goals.
Wine investment returns outperform other assets
Many studies have shown that fine wine investment can generate higher returns than traditional assets over the long run. For example, the Liv-ex Fine Wine 100 index has substantially outperformed major equity indices like S&P 500 over the past decade. Top wines from renowned regions and producers have seen their value grown exponentially. As fine wine is a finite asset that becomes more scarce over time, demand continues to rise faster than supply and drives up prices. While wine investment comes with risks like other alternative assets, its low correlation to stocks and bonds make it an attractive addition to a diversified portfolio.
Due diligence is critical in wine investment
However, high returns in wine investment are not guaranteed. Proper due diligence is necessary to mitigate risks and choose wines that have appreciation potential. Investors should focus on wines from reputable producers with proven track records. Wines need to be stored in optimal conditions to preserve quality and value. Fraud is a concern in the wine industry, so investors must verify authenticity and provenance of wines. Leveraging the expertise of knowledgeable wine investment platforms can help investors make sound decisions.
Top wine investment platforms feature robust inventory
A key factor to evaluate in a wine investment platform is the breadth and depth of its inventory. The best platforms provide a wide selection of investment-grade wines from top regions like Bordeaux, Napa Valley, Champagne and more. Offering wines across different price points allows investors of varying budget sizes to construct a portfolio. The inventory should also feature many high-demand, scarce wines that are likely to appreciate quickly in value due to their rarity. Robust inventory demonstrates the platform’s strong relationships with vineyards and winemakers to source the best wines.
Wine storage and insurance are vital
Reputable wine investment platforms also pay meticulous attention to wine storage and insurance to protect clients’ assets. Wines must be stored in climate-controlled warehouses meeting professional standards to prevent spoilage and damage. Only platforms with proper licensing to store and trade alcohol should be considered. Comprehensive insurance coverage for the full market value of wines is also essential in case accidents or disasters occur. Trustworthy platforms get their cellars audited annually and provide transparent reporting.
Low fees help maximize investment returns
Investors should look for wine investment platforms that charge reasonable fees without eroding projected returns. The best platforms often have a yearly fixed fee for storage and maintenance rather than fees proportional to the value of wine holdings. There should be low or no fees for buying and selling wines. Platforms that frequently update market valuations of wines in inventory are also beneficial for investors to track performance.
Choosing the right wine investment platform is key to succeeding in fine wine investment. Investors should evaluate inventory breadth, storage quality, insurance coverage and fees to select the best fit. Top platforms like Vinovest and Cult Wines can provide great options for US-based investors looking to add fine wines to their portfolios in 2020.