"I believe financial security is best built through a diversified portfolio of equities, bonds, commodities, real estate and, depending on individual circumstances, other mainstream asset classes."
Nope, financial security is built by understanding where we are in capital and political cycles, and positioning yourself ahead of the masses. Each asset class works until it doesn't, and you need to adapt your estate to meet upcoming challenges. Diversification isn't a way to build security; it's just roaming with the rest of the herd. Concentration in specific assets at specific times, armed with the patience to see the payoff, is how you build financial security and independence.
Wine may well have a place in that strategy, depending on where we are in the aforementioned cycles.
"Financial security is built by understanding where we are in capital and political cycles, and positioning yourself ahead of the masses."
I couldn't disagree more.
Even the world's best investors are only right 51% of the time. Building financial security is far less about consistently predicting cycles than about diversification, discipline and managing risk.
Nice article as ever. Liv-ex once owned a cellar valuation tool for collectors called Cellar Watch. We had c. 1000 subscribers with average assets of several £100k each. (We sold it to Vinous, because it conflicted with our B2B focus). We once surveyed subscribers to ascertain whether they bought wine purely for financial gain, purely for drinking pleasure or for a combination of the two. The vast majority c.75% responded a bit of both. I think there is a lesson there for every fine wine business. There is nothing wrong with taking a purist view. Many do this successfully. But important to understand that if you do you are chasing a niche within a niche. To win I believe you need to press both your customers' emotional and financial buttons. Much of the problem in the trade today is that growers in particular have been blind to the latter.
"I believe financial security is best built through a diversified portfolio of equities, bonds, commodities, real estate and, depending on individual circumstances, other mainstream asset classes."
Nope, financial security is built by understanding where we are in capital and political cycles, and positioning yourself ahead of the masses. Each asset class works until it doesn't, and you need to adapt your estate to meet upcoming challenges. Diversification isn't a way to build security; it's just roaming with the rest of the herd. Concentration in specific assets at specific times, armed with the patience to see the payoff, is how you build financial security and independence.
Wine may well have a place in that strategy, depending on where we are in the aforementioned cycles.
"Financial security is built by understanding where we are in capital and political cycles, and positioning yourself ahead of the masses."
I couldn't disagree more.
Even the world's best investors are only right 51% of the time. Building financial security is far less about consistently predicting cycles than about diversification, discipline and managing risk.
But thanks for the hot take.
Nice article as ever. Liv-ex once owned a cellar valuation tool for collectors called Cellar Watch. We had c. 1000 subscribers with average assets of several £100k each. (We sold it to Vinous, because it conflicted with our B2B focus). We once surveyed subscribers to ascertain whether they bought wine purely for financial gain, purely for drinking pleasure or for a combination of the two. The vast majority c.75% responded a bit of both. I think there is a lesson there for every fine wine business. There is nothing wrong with taking a purist view. Many do this successfully. But important to understand that if you do you are chasing a niche within a niche. To win I believe you need to press both your customers' emotional and financial buttons. Much of the problem in the trade today is that growers in particular have been blind to the latter.