One popular acronym for alternative investments is SWAG: silver, wine, art and gold. Let’s start with the W.
Everyone knows that wine gets better — and thus, more valuable — with time, but few people act on it. Fine wine bought through dealers, auctions and exchanges can really pay off.
Of course, participating in a wine exchange comes with high annual membership fees that are unreasonable for most retail investors. Plus, only a tiny proportion of wine in the world will increase in value over time, and even then, it must be bought at the right time, in the right place and under the right conditions.
And as with many alternative investments, a true valuation of wine is nearly impossible: No income, sales, earnings or cash flow is tied to the appreciating price of a bottle. Instead, taste — a subjective quality — is often key, along with intangible value, such as the feeling that comes from sharing an aged bottle with good friends.