Not a day goes by, that I ask myself “why do investors continue to invest in traditional placements such as unit trusts, instead of diversifying their investments in products where they control the totality of the process, from purchase to re-sale, knowing in advance the real fees and the different costs pertaining to this operation over the years?”
To buy a unit trust, implies delegating the management of a securities portfolio, according to precise specifications, but when the manager makes abstraction of this, it can only lead to bad surprises.
For further information (In French): http://votreargent.lexpress.fr/placements/quand-les-gerants-de-fonds-derapent_361675.html#3zlzgqfUumzghHeG.99
Placements in art or wine, have always been contested by investment professionals dealing with common unit trusts, stock exchange, mutual fund investments, life insurance etc. bringing forward many and often obscure reasons, the most important one being: a crass ignorance of the product.
Art and wine are by definition tangible investments that are perfectly controlled.
Why, you may ask? Well, simply because you are the sole and unique owner of this asset, that’s stocked in a secured environment, totally managed by yourself as well as knowing in advance the custodial fees; thereby you know the buying price and the costs involved.
You won’t know the sales price, same as all the glowing investments supposed to bring two or even three times the investment! But with wine, you will never navigate in unfathomable waters, since the price of wine is directly related to the offer and demand principles, and as far as the Grand Crus are concerned, as you certainly are aware, there is a, much larger demand than the actual offer! Have a close look around you, why are so many people buying French wines? 155 million cases of 12 bottles each sold on the Chinese market, in other words 1 860 000 bottles! To some extent some will be drunk, but what about the great vintage bottles at more than a 1000 $ a bottle? Be they Chinese, Americans, Russians, English or Brazilians and even from the Indian subcontinent, they have all understood that wine has the most speculative value on today’s markets, and of course should the windfall cease, at least, they, can drink their investment!!!