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Sunday 6 February 2022

Young people see wine as an attractive investment

Forget Non Fungible Tacos, or whatever they are called. Young investors in the UK are increasingly seeing wine as a key platform of their portfolios.

A survey of 2,000 investors in Britain found links between Generation Z, loosely those up to 25 years of age, and fine wine investment, Decanter Magazine reported.

While close to half of all survey respondents said they had invested in alternative assets, such as fine wine, whisky, art or crypto currency, this proportion rose to 62% for the under 25s.

Commissioned by wine merchant Bordeaux Index and conducted by market research agency 3Gem, the survey suggests younger investors ‘are turning to fine wine’ as a way to grow wealth, the survey authors said.

Of the respondents under 25 who invested in wine, nearly three-quarters spent up to £20,000 per year on top bottles, the survey. reported. A remarkable 7% percent said they spend between £50,000 and £500,000 per year.

A total of 39% of all survey respondents – across age groups – said they chose wine due to its relatively accessible entry point, compared to other alternative assets.

Matthew O’Connell, head of investment at Bordeaux Index and CEO of its LiveTrade platform, said: ‘For those worried about what 2022 may bring to their investments, wine’s clear capital preservation across the pandemic and its outperformance in 2021 (+19% versus +14% for UK equities) is clearly very encouraging."

Auction house Sotheby’s recently highlighted the appeal of fine wine and spirits to younger collectors in general in its auction sales report for 2021. 

It said around 40% of wine and spirits auction buyers in 2021 were new to the scene, and one-third of bidders were aged under 40.

My advice to new investors: Why would you invest in something you know very little about? Buy wine you want to drink, not bottles you think might make you money down the track.

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