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3 January 2013 Schroders adviser suggests fine wine is 'long-term investment'

Anyone who is concerned about the falling value of fine wines from the Bordeaux region should look at the price drop as an opportunity.

That is according to Schroders senior adviser Alan Brown, who has suggested that a wine which has lost its value may well regain it over time.

He said that investors should "take a long-term view," and recommended that people should avoid buying high and selling low as "the price may recover in the long term".

Mr Brown said that wine investment is linked to what is happening on the stock markets as "prices usually follow the equity markets".

He suggested that the secret to successful wine investment is not just looking at it as a long-term thing, but also ensuring your portfolio is diverse and therefore not limited to wines from a particular region.

"My wine portfolio, like my stock one, is very balanced. You do not necessarily need to go for the top wine but it is better to have a collection from different areas and different countries," he said.

Investors should not panic when values rise or fall, as whatever is happening in the market people have a choice in how to react, as long as they are not hoping to make an instant return, he suggested.

"The beauty of wine investment is the options it provides. If the price is up, you can sell it for a profit. If price goes down, you can hold it for the long term. Or, you can simply drink it!"

Alternative Asset Analysis (AAA) has backed Mr Brown's comments and agreed that taking a long term view is the key to success when it comes to investing in wine.

Anthony Johnson, an analysis partner at AAA, said that the recession has encouraged people to start looking at different potential revenue streams.

"After the economic collapse, investors started to look for a way of diversifying their portfolios against risk, and this is where alternative investments come in," he said.

He said that people who have a passion for the thing they are investing in, such as wine, are "more likely to respond to the market in the best way" and therefore make the most of it.

 Category: Wine investment

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