Alternative investment – wine


I came across an article titled “The nuts and bolts of wine investment” which was published on The Business Times on 20th June 2014. Based on the article, wine is a good investment because wine’s value grow by 10% to 15% per annum!

However, other than buying the right wine (Bordeaux is highly recommended), one of the key is the storage conditions and it is recommended that the wines be stored between 10°C and 15°C, with the humidity kept above 70%. In addition, one can buy cheaper by buying during the ‘en primeur campaign’, which apparently some of the local Singapore wine merchants does.

I am not a wine connoisseur and I have not spent more than S$100 for a bottle of wine and personally prefer whites like riesling and chardonnay.  Wine is definitely beyond my circle of competence but the returns from this alternative form of investment is attractive from an investment point of view, especially for the wine connoisseur out there who can appreciate it.

The same goes for other forms of alternative investments such as fine arts and luxury watches. Do you invest in alternative investment tools? If yes, please do share some of your experience in the comments.

The only good thing about wine investment is that if the value does not go up, at least you can drink it!

How to start investing?

There are a lot of people who wants to invest, but do not know how to start their investment. I personally think that the best way to start to learn is to read investment books and online forums and there are many investing strategies, value investing, dividend investing, dollar-cost averaging.  This is confusing for many people, myself included. And how does one really start?

For myself, I cannot commit a huge amount of money at one go and am not experienced in analysis. Therefore, I think dollar-cost-averaging (DCA) is a good way to start off. One of the key factor for DCA is to find a broker which has the lowest commission. But most of the brokers in Singapore has a minimum charge per trade, usually S$25, and this will add up to a huge costs.

From my research, there are 3 ways for Singapore investors to do DCA.
i. OCBC’s Blue Chip Investor Plan (link) – 19 blue chip counters & 1 ETF (Nikko AM STI ETF)
ii. Philips Capital’s Share Builders Plan (link) – 20 counters
iii. POSB’s Invest-Saver (link) – 1 ETF (Nikko AM STI ETF)

My DCA method
Personally I like blue chip counters and the Nikko AM ETF. Blue chip counters have strong fundamentals and will grow steadily under a good management team. For blue chip DCA, I will be using the OCBC Blue Chip Investor Plan as it has lower fees than Philips Capital. Furthermore, I have a few OCBC bank accounts which makes it easier for me to manage. I believe this will allow me to own blue chip counters at a lower cost slowly. (Eg, each lot of Keppel Corp costs more than S$10k as of my time of writing now). Furthermore, DCA will allow me to reduce my timing risk.

For the Nikko AM STI ETF, I will be using Standard Chartered’s equity trading platform (link). This is because each lot of Nikko AM STI ETF  is 100 units and is more manageable and Standard Chartered’s fees is very low. So, I can purchase Nikko AM STI ETF whenever I want to.

Hopefully, with the above method, I will be able to build up a portfolio of blue chip counters and ETF over time.

Please feel free to comment on my above method.