Feb 27, 2023
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Last year, the Fed enacted the largest interest rate hike since 1994 with the hope of combating the rising cost of living.
As everything gets more expensive, the stress alone is enough to make someone want to pour a nice glass of wine to relax. But don’t uncork the bottle just yet — it might be your saving grace.
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You might have heard that investing in fine wine is only an option for the ultra-rich, but with a new platform called Vinovest you can take advantage of the money to be earned from fine wine, alongside wealthy collectors like Bill Koch and LeBron James.
Why you should invest in wine
Wineries produce investment-grade products in small quantities, usually a few hundred bottles. That means there’s a scarcity of valuable products in circulation, and availability only goes down as people consume it.
Even better? This alternative investment is inflation-resistant.
When we spoke to Anthony Zhang, CEO and co-founder of Vinovest, he shared some insights on the performance of wine throughout different interest rate environments and the success Vinovest users have had.
“Right now, we’re in a higher interest rate environment. Last year, our average investor was able to return about 6%.”
According to Liv-ex’s report, The Fine Wine Market in 2022, wine continued to outperform equities and commodities during the year. Meanwhile, the S&P 500 lost 19.44% in 2022, its worst year since 2008.
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“So not only were we able to outperform the stock market and other broader markets, like gold and other commodities,” Zhang continues, “but we were also able to outpace the Fed rate.”
Yes, it’s a more stable investment than stocks, but everyday investors have largely been locked out of the game by the constraints of specialized knowledge and logistical factors like proper storage.
Vinovest helps you skip the difficult parts of investing in wine so you can jump straight to the benefits.
They take care of storage and insurance, so you don't have to worry about maintaining a secure, temperature-controlled environment. Plus, the wines are chosen specifically for you.
More: Vinovest review
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Your personalized wine cellar
Vinovest doesn’t shy away from a personalized approach to wine investing. Their team of human experts, as well as their algorithm, creates your portfolio so it's unique to your risk tolerance and investment goals.
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“For folks who are fairly conservative, we would take a look at [wine from] more established regions, ones that have been growing and producing very quality wine for a long time,” Zhang explains about how they develop their portfolios.
The portfolio is always curated to the investor and the level of risk they’re willing to take. “If someone is a little bit more on the aggressive side in terms of their risk appetite, they'd be getting more up and coming regions [and] in terms of the portfolio concentration, larger position sizes.”
Your money ages well alongside your wine
Similar to a bond or real estate, wine is a long-term asset.
Zhang says, “You really need to have a multi-year outlook for this asset class to really work well,” explaining that when wine matures in taste, it also matures in its return potential.
“So if you're looking to sell earlier, there are going to be less potential buyers, because most people are waiting for that wine to mature.”
This is why Vinovest aligns the expected exit windows of their clients with the expected maturity windows of the wine.
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Similar to a bond ladder, Zhang explains that you can ladder up your wines to have different exit windows: “[When] you're picking wines from different years that are expected to reach maturity along an X amount of years timeline, that can help investors be able to realize returns while investing into a long-term asset class.”
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Everyday investors can earn big
Every wine from Vinovest goes through a multi-step authentication process with their in-house experts. They have industry-leading security to make sure your money is protected and direct connections that ensure you get the lowest prices with the highest returns.
Getting started with Vinovest is simple.
Just answer a few questions about your investment goals and risk tolerance, fund your account with at least $1,000 and Vinovest's master sommeliers will use proprietary algorithms to set up your portfolio.
From there, you can sit back, relax, and enjoy steady yield on this alternative investment.
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Em Norton is a Staff Writer for Moneywise. Em holds a B.A. in Professional Writing from York University and has been writing professionally since 2019. Em's work has previously been published by Room Magazine, IN Magazine, Our Canada and more.
