Market experts have suggested that the super-rich are turning away from traditional investments in favour of passion investments such as luxury wine. At the Ideal Wine Company, we can see why.
Conventional Financial Products are not as lucrative as They Used to Be
How do you become super rich? That’s the question we’d all like an answer to. Traditionally, that answer has been that they make a killing off investing in conventional financial products such as stocks, bonds etc.
However times are changing, and international markets are changing with them. After the financial crash of 2008, conventional financial products have become less attractive to the super-rich (generally seen as those with $300 million in the bank or more) due to low interest rates.
Popularity of Passion Investments is rising
So they’ve had to find new ways to generate profit, and according to Alexander Classen, who administers the international branch of British private bank Coutts, the proportion of ‘passion investments’, which typically include luxury products such as high class cars and vintage wine, in portfolios has risen roughly two or three times in the last half-decade.
Coutts created an index to track the performance of 15 passion investments and according to Reuters, there are signs that these types of investments have proved increasingly profitable in recent years. Contrast, for example, the fact that jewels and art has returned 77% (as of January 2014) since 2005, whilst there has been a 53% return on the MSCI All Country Equity Index, in terms of dollars.
Luxury Wine: The Ultimate Passion Investment
Wine has performed particularly well in the wake of the great recession, along with other passion investments. Luxury wine is such a prudent investment choice because it only appreciates with age; in essence, you are guaranteed to make a tidy profit off of your luxury wine investment.
At the Ideal Wine Company we have seen time and time again that luxury wine isn’t just a collector’s item or a lifestyle choice, it’s something you can use to protect your finances and secure your future. Take a tip from the super-rich – who certainly know how to make money – and take a chance on luxury wine.