Satisfying Your Investment Appetite With a Wine-related Opportunity
The recent downturn of global stock markets, as worrisome as it is, remains a cyclical event. Granted, each downturn, uptick or stable period is explained as a temporary aberration, typically garnering the same rationale for each daily movement of the financial markets, whether they move up, down or sideways.
It is becoming increasingly clear that the enclaves of Wall Street traders mimic the high rollers of Las Vegas. Regardless of equity/bond markets or gambling table fortunes, the mighty players seem to fare better than the small stakes players.
The diversity of the financial markets seems to play out on a similar plane in the world of wine opinion and fortunes. The “hot” wine house of the moment seems to garner excessive attention, while the less glamorous wines carry on in maintaining a stable market. Likewise, as a flash in the pan wine house falters, it is the more traditional wines that bolster the market.
The financial market dynamic is easy to track. Hot tech stocks garner a fever-pitch following, lining the pockets of investors. Did you catch the rise of Apple stock as the Wall Street trading houses rode it to astronomical heights? If so, did you sell before they shorted the stock? Did you buy a Chinese mutual fund in its infancy and then sell before the market adjustments last week? Or do you fit the profile of the traditional investor, relying on an adviser and observing from the sidelines as the markets go whizzing by?
Are you seeking an opportunity to have a personal stake in the fortunes of an industry or company with which you have a particular affinity?
And might that interest lie in the wine industry?
There are multiple investments in which one can indulge to satiate a desire for investment opportunity and potential gain. Some run the traditional path of exchange-traded stocks and funds. For something a bit more 21st century, you may wish to consider a crowdfunding opportunity.
- Public Companies. There are about two dozen actively traded wine companies on worldwide stock exchanges. Those traded on United States exchanges include Brown Forman Inc. (stock symbol BF), which sells Korbel and Sonoma Cutrer; Constellation Brands (STZ), which sells Robert Mondavi and Clos du Bois; and Vina Concha Y Toro (VCO) which sells Almavira and Don Melchor.
- Crowdfunding. This is a more direct method of being involved in a wine project, which may offer instant gratification as a bonus. In return for a cash donation, you may receive equity in a venture or a tangible product. The websites Kickstarter and Indiegogo are the most popular. Others, specifically focused on wine, are Fundovino, Cruzu and Naked Wines.
On Fundovino.com, for a pledge of under $100, a contributor receives one to three bottles of hard-to-find wines. If fully funded, the offeror will be able to purchase new wine casks for his wines. Sixteen projects have already been completed for various needs.
By far, Naked Wines is the most successful. The 98,000 “wine angel” investors, who donate $40 per month, receive deep discounts on wines and a free bottle each month. The funds are allocated to aspiring, or sometimes struggling, winemakers. There are nearly 15,000 on a waiting list to join this fundraising/wine club hybrid.
- Here’s a new trend. Willamette Valley Vineyards, a publicly traded winery, decided to expand its facilities. In 2015, it offered preferred stock to the public, raising nearly $6 million. Investors receive a 5.3 percent cumulative dividend and discounted prices on wines.
- Wine indexes. Are you an aficionado of high-end wines but choose not to invest? Would you rather live vicariously through the fortunes of others? Try the Liv-ex Fine Wine 1000 Index (liv-ex.com). It tracks auction prices for 1,000 of the most sought after wines in the world.
If you’ve had an interest in having your relationship with wine become more personal, you have several avenues to pursue. And (to paraphrase a time-worn phrase), to put your money where your palate is.
Nick Antonaccio is a 40-year Pleasantville resident. For over 20 years he has conducted wine tastings and lectures. He also offers personalized wine tastings and wine travel services. Nick’s credo: continuous experimenting results in instinctive behavior. You can reach him at nantonaccio@theexaminernews.com or on Twitter @sharingwine
