With stock market volatility and roller coaster interest rates, people are turning to alternative investments to diversify their portfolios.
One alternative growing in popularity is investing in fine wines, thanks to a platform called Vinovest. The world of wine investing used to be closed to a small crowd of people who knew a lot about wine, and knew who to talk to for access.
Vinovest opens the door for anyone to invest in fine wines, and they even do the research and pick the wines for you.
In this review of Vinovest, we’ll look at what Vinovest is, what it offers, what it costs, and who should use it.
What Is Vinovest?
Vinovest is an online platform that allows you to easily invest in bottles of wine. They’ll also store your wine for you, and ensure that they’re kept at an optimal temperature.
Vinovest’s storage service especially allows easy access for investors looking to invest in a space that was previously limited to only those who could afford the high costs of storing fine wines.
Unlike other traditional methods of investing such as stocks and bonds, Vinovest allows you to invest in a tangible alternative. When you invest in a bottle, you actually own the physical bottle and can request to have it delivered whenever you like.
Pros of Vinovest
- Provides a hassle-free and cost-effective way for people to invest in wine.
- No experience or knowledge about wine is required. Vinovest’s expert team of wine sommeliers research, choose, and rate the wines for you.
- Every bottle of wine is fully insured.
- Your wine investments are kept in monitored storage facilities at optimal temperature and humidity. These storage centers are spread across numerous countries such as the United Kingdom, Switzerland, and France and you can choose where to keep them.
- All wines listed on Vinovest come with detailed research and studying factors such as the longevity of the wine, the critic’s score it received, its risk to return ratio, and its liquidity.
- You can sell your bottles of wine any time you prefer. They’re not locked in.
- Wine investments have a low correlation to the stock market and interest rate changes.
Cons of Vinovest
- Wine investments take a long time before you can see a return (around 3 years).
- Vinovest is a relatively new platform that was founded in 2019, and hence has a relatively short track record.
- Annual fee is high. If you choose the Starter Tier you need to pay a 2.85% annual fee.
- It can take up to 6 weeks to sell your wine and cash out your investment.
Should You Invest In Wine?
Buying expensive and rare bottles of wine provides a great alternative for anyone looking for a low volatility investment and can help diversify any portfolio. While Vinovest is a great platform for wine enthusiasts to invest in their passion, it’s also beneficial for investors who have no understanding, or connection to, the world of fine wines.
Fine wine investments have a low correlation to changing interest rates and therefore prove to be less volatile than the stock market.
However, investing in wine is only beneficial for those who are looking to make long-term investments. It takes at least 3 years for a bottle of wine to appreciate significantly depending on its global consumption and rarity.
Nevertheless, if investors maintain their portfolios for a period of time, they can benefit from impressive returns. Wine investments have shown strong returns in the last 30 years, and average over 12%.
Research has also shown that wine as an asset has surpassed returns from the S&P 500 in the last 25 years. Fine wines are also considered to be a more recession-proof investment than real estate or the stock market. While Dow Jones plummeted over 50% during the 2008 recession, fine wine dropped less than 9%.
How To Start Investing With Vinovest?
Getting started on Vinovest is a relatively easy process and requires just a few simple steps:
Step 1: Create a new account on the Vinovest platform and choose your preferred membership tier (minimum you can deposit is $1000).
Step 2: Take a questionnaire on the website answering simple questions. You can pick your risk levels and other investing preferences, allowing Vinovest to create a fully customized and fully managed portfolio for you. Depending on the answers provided by you, Vinovest’s sommeliers pick the bottles most suited to you that meet your risk assessment and can provide the best returns.
Step 3: Browse bottles of wine and invest in any ones you like.
Step 4: Use the Vinovest platform to easily monitor and manage your portfolio.
Step 5: You can choose to store your wine in one of Vinovest’s fully monitored storage facilities or have the bottle shipped to you.
Step 6: Allow your investments to grow and sell your bottles a few years down the line to enjoy great returns (or enjoy drinking it yourself).
Pricing And Fees
Investors have to pay an annual fee to be a part of the Vinovest platform, and it’s not cheap.
There are 4 different tiers you can choose from.
Starter: Requires a $1000 minimum balance and charges investors a 2.85% annual fee. The Starter Tier covers full insurance for your bottles of wine and allows you to choose from a variety of storage facilities across the world.
Plus: Requires a $10,000 minimum balance and charges investors a 2.70% annual fee. As well as everything in the Starter Tier, the Plus Tier also comes with a bi-annual review from a portfolio manager and access to rare wines not included in the Starter Tier.
Premium: Requires a $50,000 minimum balance and charges investors a 2.50% annual fee. The Premium Tier gives investors access to extremely rare wines that are only sold at auctions. It also provides access to wine futures, and invites to exclusive wine tasting events hosted by Vinovest.
Grand Cru: Requires a $250,000 minimum balance and charges investors a 2.25% annual fee. The Grand Cru Tier allows users to invest in the rarest and most exclusive wines in the world. It also provides personalized reports every quarter, and access to the Vinovest advisory council.
How Much Does An Average Bottle Of Wine Cost?
Vinovest estimates that a $5,000 portfolio would be able to hold around 24 to 36 bottles of wine. That means that the average bottle of wine goes for around $139 to $208.
Why Use Vinovest To Invest?
People have been investing in fine wines long before Vinovest came along. So why should you pay the high annual fee instead of investing in wine on your own?
Simply put, investing in wine requires a lot of research, experience, connections, and money. It takes a lot of research (and experience) in order to spot out the winning wines versus the average wines. They also need to be able to do things like understand the longevity of the wine, the wine’s critic’s score, its rarity, and its age-worthiness.
Next comes locating the bottle you want. Rare wines can be bought through auctions, via brokers, or from specialty stores, and often cost a large sum of money. Once you acquire the bottles of your choice, you then need to either create an optimal storage facility at home or rent space in a storage facility outside, as well as ensure you insure the bottles. These steps require a large investment and require you to put in a lot of time.
With Vinovest, you can get started with just $1000. You don’t need to spend hours researching different bottles of wine and determining the type of returns they might yield. You also don’t need to spend months trying to find and buy it.
How Do I Earn a Return?
Investing in wine is a long-term game and it can take years to make a profit on any bottles you acquire.
You’ll usually need to wait a minimum of 3 years to see any real returns on a bottle of wine, depending on its global consumption and rarity. Therefore, Vinovest is only beneficial for those looking to make long-term investments.
How Long Is My Investment Tied Up For?
After you invest in a bottle of wine, you can sell it whenever you like. Or if you like, you can have it delivered for you to enjoy. Your investment isn’t tied up for any period of time.
How Do I Get My Money Out?
Unlike selling stocks, liquidating your investment in fine wine can take a while. Since it’s a physical asset, investors need to find buyers to be able to sell their bottles of wine.
Therefore, selling your stock on Vinovest can sometimes take 4-6 weeks.
Vinovest: The Final Verdict
Whether you’re a wine connoisseur or just looking for alternative investments, investing in fine wines is a great way to diversify your portfolio. Not only is it a low-risk asset, it’s also proven to provide high and stable returns over the past three decades.
Vinovest allows wine investing to become more accessible for everyone. Their leading wine experts handpick fine bottles and authenticate each one, so no research is required on your part.
They also provide climate-controlled storage facilities that are supervised 24/7 and provide full insurance for your bottles. This ensures you are safe in the case of any unforeseeable circumstances, and allows you to invest in wine hassle-free.
Vinovest also offers a variety of educational resources for investors who wish to learn more about wine investing. Depending on the membership tier you choose, you’ll also have access to expert advice and portfolio reviews to ensure you make the best returns possible.
Vinovest is a great platform for anyone looking to diversify their portfolio and plunge into the world of fine wine investments.