You can enjoy great tax breaks with alternative investments – putting money into fine wine, classic cars, gold or perhaps even stamps.
But before you take the plunge, you need to realise that while they can be rewarding, alternative investments can also prove volatile and illiquid.
We explain what you need to know.
The wine market has obvious appeal as it allows investors to indulge in a pastime while making money – and if returns are good you can crack open a bottle and celebrate.
The Liv-ex Fine Wine 100 Index, which plots the fortunes of a hundred of the most sought-after wines in the world, has risen by just 2 per cent in the past year, but by four per cent in the past three months alone.
Over a decade this index has doubled, despite a slump in the most recent five years, which saw the price of many top wines fall almost a third due to poor harvests.
But some tipples have soared in value. A bottle of Carruades de Lafite 2004, for example, has shot up by 650 per cent – from less than £20 to about £150 – in just ten years.
About 80 per cent of the wines in the index come from the Bordeaux region of France. Do not trust your own palate when investing, but look to the influential American wine critic Robert Parker – who scores everything that he sips out of 100. Anything rated 97 and above is ‘an extraordinary wine’ and of investment quality.
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