I have been distracted recently from my conviction of a future crash in the US Dollar and a further downturn in the fortunes of the global equity markets. Distracted though does not mean unconcerned. In fact more than ever before, I believe that we are facing an additional attack upon the infrastructure of the financial markets and so am gearing up our portfolios to benefit.
What has been distracting me is an alternative investment. Not gold nor any other hard asset. Neither is it a hedge fund nor private equity.
It is fine wine.
Fine wine is a niche investment whose profits improve (like its taste) with age. Worldwide demand for wine has grown inexorably in the last 20 years, particularly in Japan and China. Supply is always limited but the thirst for the finest vintages is never sated.
This year the worlds leading wine expert Robert Parker, said the following, "It didn't take me long to realize that the 2008 vintage was dramatically better than I had expected. It had all the qualities that make an excellent and in some cases, a great vintage so special...with a number of wines that are close to, if not equal to prodigious 2005 and 2000 vintages."
For many, to be able to buy these great vintages purely to drink is a sign of affluence and sophistication. Whilst there are people willing to pay top dollar for that right, there will be investors enjoying great profits.
My company, Pinnacle Wealth Management has begun working with a UK company called Premier Cru that specialises in fine wine investment. We believe that they offer tremendous value through growth twinned with excellent tax benefits for our clients.
Part of our due diligence was to find independent reviews from clients of theirs. To our surprise, we found an article from 'The Spectator', one of the UK's leading weekly magazines. It's wine correspondent, Christopher Sylvester, said the following:
Opportunities For Vintage Growth
CHRISTOPHER SILVESTERWEDNESDAY, 11TH JUNE 2008
Christopher Silvester says you don’t have to be rich to invest in fine wine, and the rewards can be handsome
With somewhere between 800 and 1,000 clients, Premier Cru Fine Wine Investment Ltd (www.premiercru.com) is operated by the mother-and-daughter team of Paula and Stacey-Lea Golding and has been in business since 1992. ‘We look at wine as a commodity, not a beverage,’ says Stacey-Lea. ‘Each investment is tailor-made for a client’s individual needs.’
My own experience in the market has been a happy one. I bought a portfolio of Bordeaux wines through Premier Cru in 2001 for £2,879. When I chose to exit the market a couple of years later, I pocketed a tax-free profit of around 40 per cent. Stacey-Lea Golding has tracked my portfolio since then and in May of this year it was worth £10,355, which represents a total tax-free profit to date of 260 per cent, an average annual growth of 37 per cent and an average compound growth of just over 20 per cent. I still hold an imperial (the equivalent of eight bottles) of Château Margaux 1996, which I bought for £1,500 in March 2001. Its value this May was £4,000, showing an overall growth to date of 167 per cent, an average annual growth of 24 per cent and an average compound growth of 15 per cent.
As I said, wine investment does not have to be a rich man’s game; but it can certainly lead to your gradual enrichment".
Between January 1990 and June 2007, annualised returns of 18.73% pa were enjoyed by clients of Premier Cru. Effectively £10,000 invested in 1990 is worth £169,845 now. Thats an impressive return by anybody's standards.
Personal experience over a number of years is the best recommendation one can give. Christopher Sylvester is an independent wine professional of significant standing and a client of a company that I will recommend. I could hardly wish for a better endorsement of a new product.
For the whole article and further context please click the link below:
Christopher Sylvester's Full Article On Fine Wine Investment
Below is a brochure for Premier Cru. Take a look and tell me what you think.
Investment Brochure
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