For more than a century, investment-grade fine wines have generated strong returns. In this post, we’ll introduce you to Vint, an alternative asset investment platform for easily investing in the world’s top wines.
Fine wine has a long history of producing returns, hedging against inflation, and building global communities. Now, all of these benefits are more accessible than ever before. First, let’s explore the basics.
For more than 8,000 years, humans have been producing wine. Since the early days of winemaking in Georgia, Iran, and Armenia, production has improved, tiers of quality and style have developed, and the stories and history of winemaking have driven international interest across the world.
One of the best-kept secrets in the wine world is that these assets have been high-quality investments for a long time.
We are here to focus on the top tier: the investment-grade fine wines that have consistently outperformed other alternative assets over the last 121 years.
Wine Investing 101: Supply & Demand
For example, Screaming Eagle, considered the original cult wine of Napa Valley, has a more than 10-year waitlist. Shrouded in secrecy, only early adopters and the well-connected can get this wine direct from the producer. Once released, the market value of these wines has historically appreciated considerably over the life of the wine.
Screaming Eagle is not alone in showing strong returns as the wine ages, though. According to Cambridge Business School, over the last 121 years, on average, the global wine market has returned 8.5% annually.
Let’s go back to Economics 101 to understand what drives this return. The fundamentals of microeconomics are based on the supply and demand graph.
At release, all fine wines from a single vintage sell out immediately to winery member allocation lists, merchants, and investors (a select few cases may also be held back at the estate for aging and special consumption). The release price is typically the lowest price point a highly collectible wine will ever see. Over the 20–50 years that follow, the wine trades and the powers of supply and demand influence price.
As a consumable good, the supply of wine is ever-decreasing, and once released, no more wine of a particular vintage will be produced. In addition to an ever-decreasing supply, the demand for wines increases as it ages and the quality improves. The combination of scarcity, decreasing supply, and improving quality drives long-term price appreciation.
While supply and demand consistently work in favor of fine wine appreciation, there are other catalysts, variables, and opportunities that drive value growth.
Vint, the platform democratizing fine wine and spirits investing, takes all of these variables into account when selecting assets to be included in collections for investors. And because of Vint’s partnership with Tribevest, it’s even possible to invest in this non-traditional asset class with your friends (more on that later).
Fine Wine as a Hedge Against Inflation
As the spending power of a dollar decreases in inflationary times, people look to diversify into other assets as a store of value. With the marketplace value of the dollar going down, money sitting in bank accounts today is losing value in line with the 6.2% rate of inflation. The .5% earned in many interest-bearing savings accounts just doesn’t cover the loss of value. To guard against this effect, there are three characteristics that investors look for to counteract the effects of inflation: tangibility, stability, and a track record of outperforming inflation.
One asset that meets these criteria and has been historically used to hedge against inflation is fine wine. Fine wine is tangible, consumable, and historically stable, only losing -1% in the 2008 market crash versus the -37% loss the S&P incurred. Downside market strength and long-term stability, coupled with the ever-decreasing supply of sought-after wines makes this asset class an intriguing option for investors looking for a potential safe haven during economic turbulence.
Community-Driven Fine Wine Investing
With over 121 years of strong returns, stability, and limited correlation to traditional equity markets, everyone should be able to access this asset class. Thanks to Vint’s partnership with Tribevest, you can now join together with friends to invest in shares of fine wines.*
Vint is an investment platform that allows anyone to purchase SEC-qualified shares in expert-curated wine collections and efficiently diversify into this asset class.
Like Vint, Tribevest was created to democratize investing. Tribevest uses technology to streamline the process of investing with your friends. Now, you and your community can easily structure a vehicle to invest in assets, such as fine wine, through Vint.
How to Invest in Wine with Your Tribe
Thanks to Tribevest, there’s a low-cost, fast, and easy way to invest in Vint’s securitized wine offerings with your friends.
Whether you’re trying to hedge against inflation, improve your downside protection, or invest in something you are passionate about, fine wine investing has something for anyone. Tribevest and Vint can help you build wealth through accessing this alternative asset class.
Visit Vint’s website to learn more about their upcoming collections. To start investing in Vint with your Tribe, create a Tribevest account today!
* This is not an offer or solicitation of securities or collectibles. Interests in securitized wine investments are offered by Vint and VV Markets, LLC pursuant to Regulation A. Investors do not purchase or obtain possession or use of underlying wine assets. See Vint website and offering circular for details. Past performance is no guarantee of future results. Investments such as those on the Vint platform are speculative and involve substantial risks to consider before investing.