Could 2021 be the year of hard assets?

by Oct 21, 2020Thinking outside the bottle, Wine Trading Academy0 comments

wine-vineyard-bottles-winery rack.jpg

Paulo Pinto

Alti Wine Exchange founding member

 

Dear reader,

The covid-19 pandemic continues to be very much present in our lives, with a “psychological fear” leaving emotional scars and a deep recession because of confinements.

This could permanently alter the way people spend, save, consume and invest in the weeks or months ahead. Some economists are now talking about inflation and the possibility of 2021 to be the year of hard assets.

This is obviously not new for those following us here. We have been talking about inflation for a while, but let’s see what is typically called hard assets.

What are hard assets?

hard assets alti wine

Technically, hard assets are grouped in five categories: energy (oil and gas), agriculture (commodities like grains, coffee, sugar, livestock), base metals (copper and aluminum), precious metals (gold, silver and platinum) and forest products (paper and lumber).

I like to include another group: the alternative assets – particularly fine and rare wine, because it is a consumer product that will be immediately affected should inflation hedge higher.

Some will say that it is debatable if inflation is to be a problem for the economy, but the fact is wealthy people seem increasingly interested in real assets like farmland, real estate, gold and silver.

This proves that some people are seeing fear about inflation, even if another far bigger group may think the risk of deflation is far greater.

You do not have to follow any of those groups fearing inflation or deflation, if (and when) investing in fine and rare wine. A collector’s bottle in 2020 will be rarer in the future because wine, unlike other hard assets, is consumed providing tailwinds for very good wines becoming rare.

Alti Wine Exchange is launching the IBO of the Moscatel Kingsman Century Edition 1919. A wine with more than one hundred years. There is Moscatel de Setúbal produced every year, but it is impossible to reproduce this wine made in 1919.

jose maria da fonseca moscatel kingsman 1919.jpg

Some people are asking for more about the Kingsman Century Edition 1919. “How do I fit in?”, “How do I get access to that asset class?”… It is not hard: see more here.

For those wealthy clients who can afford to tie up money for the length of time it takes to make a sizeable return, this is a beautiful opportunity. For those not willing to wait because they collect wine to drink, it is a fantastic time to taste this exceptional wine with friends and love ones.

We do not know when this psychological fear around us because of covid-19 will finish, but we couldn’t ask for a better rare wine than this to celebrate life. There are only 100 bottles available on this initial bottle offering.

Focus on what matters and ignore the market noise.

Santé, saúde, cheers.

Paulo

 

Explore More from Our Blog

Would you bring your child to a winery?

DEAR READER, What a pleasure to be back! I admit it: these mailbags are now my favorite point of the week. Even during the contentious back-and-forth, I always enjoy opening my inbox to see words from you all. “Kind” ones, sometimes—but as you know from last week—I...

Our Sommeliers suggested wine

DEAR READER, I must be honest—I expected many more well wishes after posting that old journal entry. Everyone is modest when they say they don’t want well wishes, and so I expected there would be a few of you who saw through my “plea for privacy”. But, I forgive and I...

Because Life Needs Good and Evil

Black and white. Chaos and order. Sinner. Sinless. Life is a constant search for the happy medium, the yin and the yang. It’s as renowned psychologist Jordan B. Peterson explains, “Order is not enough. You can’t just be stable, and secure, and unchanging, because...

Thank you, Lehman Brothers?

On this day, 13 years ago, the world broke out in a panic when Lehman Brothers filed for Ch. 11 bankruptcy. Still the largest bankruptcy filing in US history, it was the climax of the Great Recession of 2007-2009. Subprime mortgages were to blame, lending money to...

Beer vs Wine, a timeless debate…

DEAR READER, Blah blah blah let’s get right to it! Dear Sommelier Ferdinand, You’ve dropped some hints that you look down on beer. Why is this, Sommelier Ferdinand? You have a growing fanbase—surely, you’re aware the effect that your insults have? And before you...

What would you do if you found an expensive wine in a cellar?

DEAR READER, Never in my life have I been happier to pontificate about wine than at my computer desk. In person is stimulating, sure, but they always talk back at some point. My lovely readers, however, only speak when I like! This internet thing has utility!...

The Beginning and The End.

Alas, the sun has crossed the celestial equator from north to south. Summer is now quite uneasy, shifting into fall in the north, while life is springing into action down south. What a beautiful time of the year! When grapes are cut from the vine to create new wine,...

Ever heard of a wine cocktail?

DEAR READER, I hope some of you learned from the reader letter last week [hyperlink to Week Ten post] and checked your attics! You never know how much wine sits above you, waiting to be uncorked and decanted—on someone else’s dime! Dear Sommelier Ferdinand, I have a...

The Future of Wine

We humans are bold if nothing else. Unlike any other species (that we know of), only we have chosen time and again to go boldly where no other has gone before. This holds especially true to the modern European, the first to really “discover” ignorance. Though they...

Could Mozart Make Your Wine More Complex?

We usually do three things when drinking wine: look at it, smell it and taste it. We activate three of our five senses to understand what’s going on in the glass. I propose we go further by incorporating sound and touch. Surely what we’re listening to while...

What on earth is a ‘Wine Decanter’?

DEAR READER, It’s come to my attention that many of you are ill-informed, misinformed, and frankly, uninformed about how wine is to be consumed. Were I only a wine enthusiast, it would be wholly dispiriting. But—wine is my profession, and I’m obligated to recognize...

“What’s My Next Question?” – Benjamin Kaplan

What’s My Next Question? On a random day like today 11 years ago, a legendary Harvard Law professor and lawyer, Benjamin Kaplan, died at 99 years of age. A rich, marked life that left an impact long after his last breathe. Apart from influencing the likes of Ruth...