How to Invest in Champagne

Sipping Champagne for no reason?  You’re going to have plenty of reasons for toasting to your success after investing in Champagne. For those investors familiar with the merits of investing in wine and other types of spirits such as tequila, Champagne is the next logical drink to invest in. There are many aspects that differentiate this choice drink from other alternative liquor investments. Some of them are beneficial and others prove some difficulty when trying to create a Champagne investment plan.

Champagne is a sparkling wine that is produced only in the region of Champagne, France. A lot of the times sparkling wine is called Champagne, but this is an inaccurate term if it does not hail from this region. There are a select set of four distinct champagne types that include, Rose, Brut, Blanc de Noirs, and Blanc de Blancs. For investing purposes, the most important brands to take note of are Dom Perignon, Cristal, Krug and Salon, just to name a few of the most prestigious and well known expensive brands worthy of investment.

Demand for Luxury Champagne

The general sentiment around the high end liquor investment sphere has been an increased interest for investors in Champagne. Savvy investors aren’t just drinking this fizzy drink but pouring a lot of cash into the drink to maximize returns. This is another great alternative investment for skilled investors looking for other places than static stock markets or plummeting investments in other traditional areas.

Currently, top buyers are not only buying the established brands, but also looking forward to new avenues that are being touted as the next best Champagne investments. One of these examples is Armand De Brignac, also known as Ace, this brand shot into the spotlight after Jay-Z began talking about it. This type of media presence has been integral for exclusive Champagne rising to prominence, as not just some far off European aristocratic drink of choice, but something that appeals to the general populace and for that matter, gives investors more reason to invest in this burgeoning alternative commodity.

According to Scott Assemakis, one of the founders of European Fine Wines, he has said that more and more people are inquiring about Champagne as an attractive investment asset ever since the drink rose through prominence because of celebrity endorsement. Investors do need to keep in mind that this is another long term alternative investment. The typical timeframe for investing in Champagne is around six to ten years before maturation.

Unlike the usual wine investment that persists of investing in an established brand, for example a good Bordeaux, Champagne has traditionally been seen as just something to drink and not an investment. This means that the idea of Champagne as a recent investment is new as opposed to traditional idea of investing in wine.

With this being said, some of the more ideal years to invest in some of the top brands are from the early to mid nineties and to a point some mid 2000’s fetch some decent prices.

Top Branded Bottles

The spectrum of Champagne that is worth investing in is minimal and that makes it more important to look out for certain types of brands. Here are some of the top performing Champagnes from 2014 to 2015.

branded-champagne-investing

From this list it can be gauged that most of the top Champagnes are from a select few brands.  For a long time prestigious Champagne has been an excellent investment, it’s only until recently that the market has begun to recognize its full potential. This new phenomenon has been a welcomed change in the Champagne industry. From the outside collector’s perspective it can be viewed as a safe and often times affordable type of investment that is not going anywhere anytime soon. At the lower range of Champagne are bottles worth a thousand dollars or euros, with a scope that goes up to the upper thousands. A few choice bottles have yielded incredible prices from Krug, Armand de Brignac, and of course Dom Pérgnon.

  • An example of a premier Champagne is the Krug Clos d’Ambonnay originating from 1995.  This bottle commands a price tag of $4,000. Before this Champagne was released it was aged for fifteen years and was one of the most expensive release prices for a bottle of Champagne. Of the Clos d’Ambonnay variety — there are only 250 cases produced and this Blanc de Noirs has been created completely from Pinot Noir from a southeastern village in the Champagne region.
  • Armand de Brignac Brut Gold is the top choice drink at this Champagne label. It’s made from a balanced mix of Pinot Noir, Pinot Meunier and Chardonnay. This non-vintage Champagne bottle goes for $6,900 right off the shelves.  Connoisseurs have considered this a prestige drink with lively and silk bodied textures, something that is definitely going to be on the elites’ taste palate and ripe for buying.
  • Dom Pérignon Rosé by David Lynch is produced by the largest Champagne label in France, Moët et Chandon. This select bottle was outlined and designed by a Hollywood director, David Lynch. There were only 10 of these bottles created and each bottle costs  $11,200. It was made in 1998 and the price will only be increasing. The taste is said to have a rich fullness of dried fruit.

Procurement & Storage

There are many places for investors to both buy and sell Champagne, similar to the wine industry. There are a large pool of private investors along with collectors and varied auction houses. These are luxury goods and there will always be a growing demand for them. Another benefit to Champagne is the fact that French authorities regulate this high quality alcohol through something called Appellation d’origine controlee (AOC). This group regulates the available stock of high end liquor in order to not flood the market or displace the prices. As an after effect from this, liquor assets can only increase in value as stores of Champagne become more difficult to find.

It is recommended to only look for the top quality brands that are well known when looking to buy and store Champagne. There are of course going to be excellent and delicious Champagne out there, but the money comes from the famous brands commanding the prime price and being able to hold their value throughout the years. These Champagnes are the prestige cuvées and they need a safe place to age before coming to fruition to sell.

Champagne needs to be stored in temperatures that range from 45 to 55 degrees Fahrenheit. It needs to be placed in a dark room and not exposed to light to minimize any light damage along with the humidity level at around seventy percent. What most people do is contact a specialized Champagne merchant that sets up your investment in a storage warehouse created specifically for the purpose of keeping your Champagne safe. It has all the correct climate controls so the investor doesn’t have any additional worry.

Price Predictions for Future Investment

Champagne is a great starting point for liquor investors because it is at times more affordable than directly investing in Bordeaux wines and it is a growing new industry for alternative investments.  Vintage Champagnes saw an average increase of around 10 percent growth from 2014 into 2015.  An example of a large increase has been the Krug Brut 96 that has increased by 50 percent in the past five years.

While investment markets are looking for alternatives in the liquor sphere, vintage Champagnes have become the new premier investment vehicle. According to one of the top websites for tracking wine and Champagne, Liv-Ex tracked an additional increase from just the Champagne index – which tracks a variety of vintages, an increase of 11.9 percent between the years of 2011 and 2013.  In comparison to an elite starter Champagne to a Bordeaux wine, investors can see the price discrepancy for beginning investors. For example a top vintage in the premier selection will cost around $2500 as opposed to a Bordeaux wine that may be starting out at around $10,000 for a bottle.

Even more evidence of Champagne’s quality for investment is comparing the Liv-Ex data from the past five years between the Champagne and wine index. Over this time period the Champagne 50 Index surpassed the Liv-ex Fine Wine 1000 Index at an increased rate of 170% returns compared to the wine’s return rate of 143%.

Champagne offers investors of all kinds unique benefits; beginners have a low entry point, while experienced investors get valuable diversification in their drink portfolios. The market is quickly growing out from its usual area as investors from Asian markets are increasingly getting more interested about fine wines and Champagnes. As their education and thirst for the finer things increases, so will the value of these bottles. The future of Champagne investment has a few great things going for it. There is the fact that the creation of these fine sparkling wines has its traditions rooted in hundreds of years of history. This helps the integrity of the business to not cut corners and keep up with its legendary image. Along with that fact is that the regulatory forces in position are not going to allow any volatility to hit the market.

Champagne houses are catching wind of this new trend and hoping to capitalize on it.  Dom Pérignon is the best example as they have begun proliferating pre-release campaigns in order to hype up their products before they go out to the public. The way this works is that buyers can purchase their sparkling wine a couple years before it is even bottled. This gives them a cheaper price point to begin and already establishes the notion that the buyers are doing this in order to invest in the Champagne. The future for investment is ripe with promises and potential growth, leaders in the industry would like nothing better than to see the increased interest in Champagne investment.

How to Invest in Tequila

If there is one type of liquor out there that everyone loves to mythologize, it is tequila. It may produce some magical nights with the added capability of producing some capital gains. Tequila is a unique brand of spirits as its importance is closely tied to its geographical prominence similar to wine. This means it is extremely important as to where the liquor was produced due to certain climate conditions and ingredients.

When investing in certain aspects of tequila, it is best to know just what you may be getting into. This includes knowing what process the tequila went through whilst it was being created, which has a lot to do with the quality of the tequila and thereafter the price as well. There are multiple classes of tequila sold in the market, some will be worthless as an investment and others highly coveted. There are also multiple ways of investing in tequila, through the companies themselves and even by investing in the farms and plants used in creating tequila.

Merits of Quality Tequila

When starting a new investment, it is always best to familiarize yourself with the major details surrounding the business or sector you are investing in, investing in liquor and specifically tequila, is no different. The first step in investing in tequila is being able to understand the difference between what can truly be considered tequila and what cannot be.

All tequilas come down to being mezcals, that is both tequila and mezcal are derived from the class of plants called agaves.  But here is the important distinction to be made for would be tequila investors to not miss out on. True tequila is only distilled from the blue agave plant that is native to only certain places in Mexico. Certain regions in Mexico have the correct altitude and soil makeup in order to provide the necessary qualities in creating tequila. These areas include Nayarit, Michoacan, Tamaulipas, Guanajauto, and Jalisco. The reason to remember these names is because the majority of any quality investment worthy tequila will hail from one of these five regions of Mexico.

Now that it has been established that tequila needs to hail from these regions and be produced from the blue agave, there are other aspects to take into consideration. There are many different classes of tequila sold out in the retail market that just don’t cut it in terms of long term worth. Low grade and inexpensive brands that cite blue agave on their labels are misnomers unless they specifically state the phrase “100 percent blue agave,” only the purest tequila is made with one hundred percent blue agave. In order for the tequila to be labeled as “made with blue agave” it needs a minimum of 51 percent. The rest of the ingredients can then be a mix of different agaves, corn sweeteners and different flavorings.

Different Tequila Distinction:

  1. Gold Tequila, also considered “mixtos” are not made purely of 100 percent blue agave. These types of tequila are not aged before being bottled.
  1. Silver tequila is a clear type of tequila that is one hundred percent made out of blue agave. It also goes without aging, but some creators will let the silver tequila sit in the casks for a couple weeks.
  2. Reposado tequila is let aged for a couple months to a year in wooden barrels. By sitting in wooden barrels the flavor of the tequila takes on notes of wood flavor. Different types of wood produce different flavors, some of these include white oak and other varieties of oak.
  1.  Añejo tequila is the vintage type of tequila and one of the tequilas that is going to fetch a higher investment price. It has a much deeper and more complex taste as it is usually aged for three years. A recent development in tequila distillation has been extra añejo, this has a minimum of three years for maturation. As many know the older it is, there are greater profits and investments in return.

Alternative Investment Strategy

It is easy to invest in the market and follow trends in the tequila market, and that is something that should be done. But there are also other ways of direct investment into tequila markets. Some of these include investing in the blue agave itself. The plant is a slow growing specimen that usually takes eight to twelve years before it matures. Investing directly into the growing and procurement of blue agave is a smart investment because of the growing demand for tequila, as increased tequila demand has and will result in a shortage for blue agave that is ready to be harvested.

Between now in 2016 and through the next two years, the price for blue agave is expected to almost double during that time period. The reason for this shortage is because smaller farms at the time can’t compete with the larger ones supplying tequila makers with blue agave, especially the ones without their own agave plantations.

For those investors looking to capitalize on this high risk scenario, they’d be taking a risky investment by looking into pouring some money into smaller sized distilleries and blue agave producers.  As the agave shortage continues this could be a promising investment for those distilleries that stay afloat. A good way to directly invest in something like this would be through a group investment of some sort through either peer to peer lending or crowd funding. This helps reduce the inherent risk and cost to the individual investor.

There are companies out there like Mexico Business to Business that works on connecting investors to different tequila companies, distilleries, and farms. Aside from the actual production of the tequila, there is other avenues this company puts forward like investing in tequila bars and tours in the tequila producing areas of Mexico.

Unique Expensive Tequilas

There’s a great selection online of expensive bottles and different rare types of brands. Here is a look at some of the most expensive collectable tequila bottles. They fetch these sorts of prices for their prestigious qualities in production and jewel laden artisan crafted bottles.

  • A high end Tequila, but entry level to the world of expensive tequilas is the Gran Patrón Platinum. The starting price for this bottle of tequila goes for $250. It is known for its citrus like flavor due to the volcanic ash that inhabits the high altitude hills it was grown in. This is a great bottle to buy and hold onto as it can fetch some higher prices in the future.
  • Another top of the line tequila from a well known retail brand is Don Julio Real. This is another favorite amongst amateur and professional tequila investors and drinkers. It has a high end bottle and is produced in Guadalajara. One of the only ways of purchasing this bottle is through buying it where it is grown and bottled. Making this a highly sought out after drink that could be resold for much more of its original $350 value in other places around the world.
  • Now comes the heavy hitter in the realm of tequila that is bound to make some investors quite thirsty. The Clase Azul Extra Anejo is an extra aged tequila done so in sherry oak barrels. There are only 100 of these bottles created and manufactured yearly. The design of the bottle is done so with silver and platinum and a bit of 24-karat gold. The price tag for one of these rare bottles comes out to $1,700.
  • The most expensive bottle of tequila starts at $225,000, way outpacing any of its other competitors. The name of the tequila is the Ultra-Premium Ley .925 Pasion Azteca. The bottle is a hand crafted bottle that was created from platinum and white gold. Another one of these bottles goes for $1.5 million encrusted with diamonds on the bottle. Examples like these just go to show that the world of liquor investing, and for that matter the bottles that hold them can be a lucrative affair.

Celebrity Investment & Endorsement

There is a reason that there are a lot of celebrities getting involved with the tequila industry. Some of these people include Sean Combs, Carlos Santana and a slew of other public figures. The reason being is that the high end market for tequila is a growing industry. Between 2009 and 2015 sales for tequila in the United States increased at a compound rate of nearly 5.5 percent a year. What helped increase this was the new line of tequilas being produced by many different celebrities. This was due to there being premium growth sales. This type of increased growth is making big named investors get interested in a market that is considered an alternative type of investment, which gives some added validity and stability for alternative investors now. For investors looking to put some money into stocks here, there are a few good options.

Investment Opportunity

Diageo is a company that is trading on the New York Stock exchange and produces the largest amounts of spirits in the world. It was some time ago that the company acquired complete control of Don Julio, arguably one of the most noteworthy and best tequila investments.  Sean Combs also brokered a deal with the company for the production of another luxury tequila brand called DeLeon. This is definitely a company to look into. The past five years has seen Diageo’s earnings per share increase by some 17 percent.

Another older company based in America is the Brown-Forman Corporation, created back in 1870. It has just begun acquiring and picking up new tequila brands, as it currently holds four.  It’s earnings per share growth was 23.5 percent in the past five years.

The reason for these massive and consistent gains is because the luxury tequila market is a fast growing industry that is not letting up anytime soon. So no matter what way you go about investing in it, there’s the possibility for large gains.

Bitcoin Price Prediction: How High Will It Go?

Bitcoin was originally the star of the new breakout disruptive technologies. It was the crypto currency that was both going to completely revolutionize the way the monetary system worked and elicit change in a slew of other industries.  To others it was some sort of voodoo magic technology used in the black market that was going to just end up as some sort of fad. Both of these points of views are wrong about the current and future state of Bitcoin. Recently, the blockchain technology has taken over the spotlight as the underlying technology fueling crypto currencies.

Bitcoin Current Use

Bitcoin’s current use is going to fall somewhere within adoption on the retail and speculative level. Major companies like Microsoft, Intel, IBM, etc. are focusing more on experimenting with blockchain technologies instead to see how it will help them service their clients. Either way all of these new uses of the blockchain have been inspired by Bitcoin and it will still serve a very important focus, meaning that investors should still be putting their money into bitcoin one way or the other.

Some of the aspects these major companies are taking from the bitcoin technology is the multi-signature configurations combined with end to end encryption. All of these services are quite helpful in the financial and other related industries.  Nonetheless, bitcoin is still one of the most important examples of the blockchain in action and is going to continue to be an excellent place to invest in. Bitcoin is the only large scale and open source blockchain technology at work. It is also an example of a public blockchain. This is good for bitcoin because it means that they won’t have competition from large scale financial institutions or other types of financial technology to displace bitcoin, right now it is here to stay.  The creator of bitcoin, Satoshi Nakamoto, said that the current iteration of bitcoin he programmed would not last that long but would do so in another form. Now may as well be that transitionary shift and is evident in the current price and future price points for bitcoin.

Bitcoin Price Points

Approaching the middle of this year and entering the latter half of 2016, the general consensus and sentiment has been that the bitcoin price has been stagnant or at least leveling out. The price has not been moving or fluctuating much. At this moment bitcoin is seeing its first semblance of stability. For those following the bitcoin madness of 2015, right now is a reprieve from the past turmoil and volatility of the past couple years. The price had fallen right below $200 in January. Crypto currency investors were certainly feeling the pain at that time.

After this time bitcoin started to slowly rally upwards, staying at home around $230 for some time. In November the price started to rise upwards and reached $300 then back up to $330. Currently bitcoin has stayed in the low to mid $400s.  Bitcoin has finally found it’s stable price point devoid of volatility. Currently there are no signs of impending financial doom nor is there anything to make investors suspect bitcoin could collapse anytime soon, instead this is the time for speculation for future price points.

Onward to the Hopeful Roaring 20s

Bitcoin has become one of the best performing investment commodities of the past century. During the advent of bitcoin, a user could purchase bitcoins for pennies. Now that price is at $400. During the peak bust time, a single bitcoin was going for $1000 a BTC circa 2013.  Now granted if everyone who owned bitcoins at the time didn’t spend or utilize them, the current price wouldn’t be what it is today and the idea of the technology would be a failed proof of concept.

Still, many people out there are worried that bitcoin has peaked, but bitcoin hasn’t even begun to peak. When bitcoin does peak, investors all over the world are going to feel it.

There are several factors out there right now that lead to bitcoin being worth at least $1000 by 2020, if not close to it. Concerning these same factors it’s almost a guarantee that bitcoin will at least increase past its current market price. A large number of experts and crypto currency consultants have given their opinion on the upcoming price. Richelle Ross, a crypto currency consultant, believes that the price this year will hit at least $650. Daniel Masters, an owner at Global Advisor’s bitcoin fund (a multimillion dollar bitcoin fund), has said that  2016 could be the year bitcoin hits some all time highs. For reference, the highest all time high has been $1,124 dollars. Some estimates are even far surpassing the modest $1000 goal and some believe it could hit $4,400.

Investors could see their investments grow tenfold if any of these investments predictions turn out to be true. But of course no one can predict the future so it is important to dig deeper into the reasoning and multiple factors these price points may turn out to be true.

Underlying Factors

One of the most important underlying factors that will cause bitcoin to increase its value is in the very nature it is created. This currency was created with the intent to only appreciate in value as opposed to depreciating. Comprehending what this means is vital for intelligently investing in bitcoin.

The principle behind bitcoin is that the amount of bitcoins is only allowed a max supply of 21 million. That means when all the coins are mined there is no way for there to be created any more. On the other hand governments have the unlimited ability to print out new currency any time. Once the cap is reached there will no longer be any more bitcoins created, that is to say there will never be more currency issued.  Quick lesson on how bitcoins are mined.

  •  A block is created and then is solved using a computer through a complex set of algorithms.
  • Once the computer has solved this block, the miner is rewarded bitcoins in exchange.
  • This used to be easier and could be solved by even just using a home PC. Now the process is much more difficult.

Now the bitcoin supply number isn’t only capped, but the flow of bitcoins into the market is also slowing down as miners progress forward. That’s why it’s so hard now to mine bitcoins and requires specialized computers or having to join mining pools by linking with other computers mining. The types of computers in order to do this are specialized for just mining and quite expensive. So that becomes an investment in itself before even receiving any coins.

Every four years the number of bitcoins rewarded per solved block is cut in half. It used to be where 50 bitcoins would be awarded and then it went down to 25 bitcoins. Soon the number will be splitting again in 2016 and eventually around 2021. The nature of supply and creation is the most important aspect to take into consideration when investing in bitcoin. Satoshi believed that be utilizing this method it would have the intended effect of dramatically raising the price and value over time.

Now barring mention of the 2013 bitcoin bubble burst, the general consensus has been that bitcoin is constantly trending upwards. These trends are important observations to take note of. At times when there is a significant increase people get the idea that they have to buy at this time before prices get even higher, the basic premise of that strategy is so they can make more money later on. Sometimes this type of thinking can be negative and cause an artificial inflation in the price, causing an eventual crash until levels even out to a more secure price.

This is exactly what happens to the many different financial investment spheres. The most notable one was the housing market bubble, as well as the constant inherent boom and bust cycles unique to the oil industry. When speculation runs rampant there is the possibility for a bubble. Bitcoin had its overvaluation in 2013, but luckily the price rise happened in a short amount of time and the market correction has occurred.

Investing in Bitcoin Now?

As an alternative investment not directly tied to the stock market, bitcoin has the chance of being used as a safe haven currency investment. The year started off turbulent due to China’s lapsing economy and other various issues regarding commodities, federal interest rates and other varied fears compounded together. When stock markets are declining, people lose faith in the financial system as a whole. In the great recession of 2008, for example, prices for gold flared up as people became less confident with paper currencies as well.  If stock markets suffer another large hit in the future (which is a possibility), bitcoin prices could drastically raise.

These types of steady gains are going to continue in the future, the basis for this comes again from the slowing creation rate of bitcoin and increased validity as a currency.  If the price was just to increase by 15 to 25% per year, the price will either top off at around $715 to $1000 a bitcoin. These gains are more than possible and probably outpace any gains in the stock market, making this an ideal stable time to buy bitcoin.

Investing in the Finer Things in Life: Wine

Drinking wine is an age-old tradition. One of the first great western civilizations, ancient Mycenaean Greece, owed much of its success to the cultivation and creation of wine.  For investors this is an ageless investment regardless of the current era. Let’s invoke the spirit of Dionysus, the Greek God of wine, and see the possibilities that await new wine investors.

There’s a certain type of satisfaction when investing in something you enjoy. Imagine buying a bottle of cabernet for $40 and holding out knowing that this small investment will be worth much more in the future.  One of the first things to keep in mind is why you are getting into wine investing; are you a budding fine wine connoisseur? If that’s the case then if you decide to drink some of your collection along the way than that’s just all right. But if you would like to assemble something to sell years down the line, there’s a few ways to go about it.

Wine Investment Basics

Wine investment is usually done through two different avenues. The first method is either buying and reselling single bottles or cases of a certain type of wine. The amount of wine usually will be sold in a set of 3, 6, 9, or 12. The other method is going to be purchasing shares in a wine investment pool.  For the inexperienced investor this may be a promising way to invest.  There are thousands of wine producers all around the world, given this fact there are only roughly a few hundred producers that produce the sort of elite wines that fits the standard of being called a fine wine or for that matter a financial investment.

Around ninety percent of fine wine for investing is produced in the Bordeaux area of France.  Certain types of vintages from renowned vineyards have the possibility to sell for thousands per just one bottle. The distinction of being considered a fine wine starts at the $50 price point.

Fine wine is considered a Veblen good.  Simply put this means that as the price rises the demand will increase as well. Fine wines are a status symbol. The reason being is because everything that went into a certain wine can never be replicated. Certain weather conditions, year produced and production methods cannot be duplicated, all of these factors add to the allure.

Buying & Storing Wine

For storing regular wine you’re going to drink within a couple weeks, you can put it in a wine rack somewhere in the home. Although, if you’re going to be storing wine for years at a time, it is imperative to make sure to store your collected wine in optimal conditions. A room that is too hot will speed up the time it takes a wine to mature, which is something you don’t want nor do you want a room that is too cold, as the wine will produce crystal flakes.

The best place to store the wine is in the basement or darkened closet. But for serious wine investors with the space to for it, it’s best to purchase a wine cooler. There’s a great selection online for purchase.

In addition to buying the equipment and having enough space for the wine cooler, you’re going to need to factor in electricity costs for running the wine coolers. Before buying any wine cooler look at the energy ratings and electricity use before buying one. This information can easily be passed along to the electricity company and you can budget how much this will cost for your overall investment.

Similar to jewelry, expensive wine is considered a valuable item. One of the first things to do is to also talk to the home insurance company about how your collection will be covered. Wine insurance is a great way to cover your new investment if anything should happen to them. It’s best to shop around to see how much different insurance deductibles amount to.

There are other ways of storage to consider if storing at your home is not a feasible option. Online databases of different warehouses show the wine storage location and special offers they have.

Alternative investing in wine can be risky, but that is why it is important to weigh out all the costs that come with procuring and storing fine wines. Be prepared to drink whatever you don’t sell, or better yet toast to your new successful sale.

Researching Price Conditions for the Wine Market

There are two important indicators out there to look for when researching wine’s current and predicted value.  These two indicators are scarcity and rating. Wine critics out there rate wine of a scale of 1 to 100. Wines that are in the ninety-five plus range are of superb quality.

Predicting scarcity is a harder thing to do. A wine that is in limited production is a good sign that the wine will maintain its scarcity. Research different wineries that are of interest to you and they will have a list of past price points. These different types of prices can be utilized to predict what the future will bring for a certain vintage.

There are ranges of many different websites that help out small time wine investment newcomers. Just as there are indexes to track stocks and other alternative investments, there are many indexes for fine wine. These indexes help track the value of your own collection as well as future purchases.

Liv-ex is an online trading platform and is used by professional wine merchants. Investors are able to utilize the website to check prices on almost any type of fine wine out there. The website offers a small amount of free price checks per month. If you want to have unlimited access for price checks, it is a subscription fee of £5.99 per month.  Wine Owners is a similar website that is directed towards the private investor. It is a similar service to Liv-ex. Potential wine buyers can enter the details of their collections and track changes in value based on past auction prices.  This is a great way to check out your holdings in the form of different charts and graphs, similar to how an online stockbroker website would function.  When you are ready to sell a wine, you put the price that is acceptable for payment, as a seller. On the other end is the buyers indicating how much they are willing to pay.

If you do not have the wine in physical possession then the trade will be done online and the shift of ownership will occur after going through a couple different types of checks and balances between the wine brokerage.

Getting Ready to Sell & What to Expect

Buying and storing the wine is only the first leg of the wine investment journey. On average a lot of wine investors hold their wines for a minimum of five years. This gives it time to mature into its full bodied flavor as well as gain a prestige around it. One of the common methods of selling wine is done through auction houses. When dealing with an auction house you are going to run into commission fees.

It’s best to look out for different online auctions, as they will charge different fees.  This information can be found on each individual website. Brick and mortar auction houses will need to be contacted through phone in order to receive more information. This serves as another way to compare price points for a certain type of wine. If one online auction site lists a case at $5,000 and another $10,000, this is something to take into consideration regarding commission fees.

Noteworthy Fine Wine Prices

  • Domaine de la Romanee-Conti, commonly abbreviated to (DRC), is one of the world’s most expensive wines and often considered one of the best. The wine hails from Cote De Nuits, France. An average bottle will sell for around $15,000. Some of these bottles have fetched prices  that neared $200,000 per bottle.
  •  Château Mouton Rothschild, is another wine that comes from the Bordeaux region of France. It is well known and has the distinction of first bottling the wines at the harvest rather than shipping it off of the estate.  A 1945 bottle was sold for $114,614 in the late nineties. They still consistently put out wine that is increasing in price everyday.

These prior examples are just some of the many successful sales of varying types of wines. If it was not evident already, investing in wine is a long term alternative investment that lacks liquidity.  Different years and different bottles have varying price points that have been turning a profit for years. At the same time the elite market is always looking for the next best wine to drink or even collect for themselves.  There are always other options for investing in wine through other roundabout ways, similar to other commodities and alternative investments. One of these ways is through investment funds.

Alternative Wine Fund Investing

For investors not too keen on actually buying or investing the wine themselves, there are funds out there that allow for investors to distribute capital to the fund in exchange for exposure to different wines throughout the world.

One of these funds is Wine Source Fund: a fund that is backed up by the Wine Source Group. They are global wine merchants that are registered under the European Union and diversify themselves through not only wine, but other spirits as well.

Another interesting fund created a few years back is The Bottled Asset Fund. Originally it was launched with a $9 million investment and gained substantial returns. The idea is to focus on wines mostly created in Italy.  Many fine wines hail from the Bordeaux reason of France. That doesn’t mean other areas should be neglected. Italy and Napa Valley are other hotspot destinations that produce many fine wines. As the international taste palette for new wines grows, so will the allure and investment in wines spreading throughout other parts of the world.

The possibilities and selection for a great wine collection are endless. Equipped with the right information and knowledge, a wine connoisseur can be on their way towards buying wine that is going to be an excellent investment many years down the line.

4 Billionaires That Are Buying Gold (And Why You Should Too)

Since late 2015, early 2016, there have been a number of billionaires who’ve been stealthily accumulating gold over any other form of investment opportunity that their wealth gives them access to.

When you look at how far south the gold price has managed to move over the last four years, you might reasonably question the logic of their buying spree.

The simple answer is that gold has always proven to be a pretty good portfolio hedge when the investment waters turn choppy. The first few trading days of 2016 were way more than a gentle ripple and billions were wiped off of stock values, and this prompted a spike in gold prices.

So should you be taking the hint that the super-wealthy investors have been providing with their gold buying spree?

Bet against the crowd

If you managed to become a billionaire, it is fairly safe to assume that you will have probably taken a few risks, have a knack for finding money-making opportunities and just as importantly, be prepared to trust in your own instincts and opinion, which can often mean betting against the crowd.

It is interesting to note that only half of a percent of the world’s wealth is invested in this asset, but gold tends to punch above its weight in comparison to other assets, and this is why a number of billionaire investors have been attracted to the safe haven prospects that it is always offered to provide in times of economic and political uncertainty.

Stanley Druckenmiller – The man with the midas touch

Stanley Druckenmiller is a billionaire who has been able to graphically demonstrate exactly why he is such a wealthy individual.

Druckenmiller managed to generate an average annual return from his fund of 30%, with an incredible run of success that run from 1986 to 2010, without ever having a losing year in all that time.

Considering the rollercoaster ride that you can experience with stock market investments, to never have a losing year in all that time, is very impressive, and an obvious reason why he has a net worth that is estimated to be around $4.5 billion.

Stanley Druckenmiller quit while he was ahead and closed his fund in 2010, but the key point to note, is that he subsequently holds 20% of his entire portfolio in gold. For someone with such a midas touch, that is a strong hint that you might want to follow his lead and consider this a good time to invest in gold.

David Einhorn – From $900,000 to $11 billion

Einhorn set up his fund, Greenlight Capital, in 1996. He has now built that portfolio up to a value in the region of $11 billion, and he is another prominent billionaire who has taken a shine to gold.

Einhorn has suffered some falls in the value of his portfolio as a result of his determined commitment to gold, as he has long held the view that the Central Bank’s stimulus efforts would have the effect of pushing up the value of gold at some point, when inflation started to move north.

He has been publicly vociferous about stimulus efforts and was quoted as saying that “Monetary policy and regulations have combined like a failed chemistry experiment to create a potentially destructive force that should not exist outside of fiction.”

His belief that the Fed’s intervention in markets has added to the attraction of holding gold over green, which is why his fund continues to hold about 10% of its value in gold bullion.

Ray Dalio – Hedge Fund Big Daddy

If you are in control of the largest hedge fund in the world, you are more likely to be someone who gets things right more often than you get them wrong, when it comes to investment decisions at least.

Therefore when Ray Dalio was quoted as saying ‘If you don’t own gold, you know neither history nor economics’ , you don’t need too much guesswork to get an idea of where he stands on holding a percentage of gold in his portfolio.

It would seem that Dalio considers that gold offers a sustainable allure and it has two distinct things going for it that help make it attractive to a billionaire investor, and indeed any investor seeking to achieve a profitable balance with their holdings.

The two key demand drivers for gold can be simply identified as fear and love. Fear about money supply and negative interest rate, and love, which is the cultural affinity parts of the world like Asia and the Middle East have with the precious metal.

Both of these demand drivers offer a compelling reason to buy into gold, which is a view that Ray Dalio, amongst other billionaires, appears to subscribe to.

Philanthropic Paulson also likes gold

John Paulson has amassed a personal fortune that is estimated to be worth close to $10 billion and as well as being generous with his wealth, he is also someone who takes care to protect what he has managed to accumulate.

Renowned for his philanthropy, such as giving a $400 million endowment to Harvard, he also has a strong opinion as to the current attraction of gold. Paulson owns 10.33 million shares of GLD, which is the biggest gold ETF in the world, and despite some volatility in the price, he seems committed to remain invested in gold, mainly because he sees inflation will become an issue at some point in the near future, which he believes will produce a big upswing in gold’s favor.

Considering that Paulson earned a reputation as a successful contrarian, when he famously bet against the housing market in 2007, anyone looking for a way of protecting their savings from future investments volatility, should definitely consider gold as part of their portfolio.

These four billionaires are attracted to the long term prospects of gold, and maybe you might want to take the hint and follow their lead.

How the US Elections may impact the price of Gold

Elections always tend to influence financial markets in either a positive or negative way, mainly depending on the general perception as to whether the incumbent in the White House is going to be a change for good, or not as the case may be.

There are some interesting historical precedents when it comes to stock market reactions immediately after a presidential election, which in turn, has a definite influence on other financial instruments and markets, such as the price of gold.

You might be surprised to discover that every US election staged since 1888, has resulted in average stock market decline of about 0.5% in the first three days of the first new presidential week. The longer term outlook if you are looking at statistics, is that stocks have historically fared better over the full four-year term, when a Democratic administration has taken up residence in the White House.

The trouble with historical statistics and precedents, is that there may well be a point where markets don’t react in the way you expect them to, next time around.

That could certainly be the case when you have two front-runner candidates for the White House, who polarize opinion. If Mr Trump swept to power, all previous bets could be off.

So the question is, if there is uncertainty or optimism when the U.S election result is known, what will be the impact on the price of gold?

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This graph (courtesy of The Real Asset Co) asked the question, which President was worst for the dollar, measured by percentage rise in gold prices?

You can see that Obama had a positive influence on the price of gold, especially when he was granted a second term. In fact, the history is that Democratic presidents send gold prices up and the dollar down, although if you want an even more positive buy signal, 2nd term Presidents in general, tend to send gold prices higher and push the dollar down lower.

Election cycles

There is no question that election cycles do have an impact on where the price of gold is headed.

The price can often be considered as a response to a situation such as when the economy is seen as artificially strong, in an attempt to influence the intentions of the voting electorate. Whether you take a cynical view or not about the idea that the economy is sometimes stimulated for the purpose of trying to sway an election, there is no question when you look at past results, that when the economic news is favorable, the price of the dollar will often rise and gold prices will stand still or maybe even fall slightly.

If you are a believer in history repeating itself, you can find plenty of examples of election year price volatility for gold. If you take the last three elections in 2004, 2008 and 2012 for example, the 12-month period leading up to each election have all resulted in a drop in gold prices just prior to the election.

Gold has traditionally been regarded as a safe haven in challenging economic times and therefore if there is a positive outlook just prior to an election, it is a predictable consequence that the gold price would come under pressure.

Politics creates price sensitivity

Political maneuvering can be responsible for gold price volatility, just as much as economic conditions influenced by other factors.

Gold prices are no different to stock market indexes, in as much as they are both sensitive to political and economic indicators and events. When the national debt figure is considered to be high enough for concern, when inflation is running high, or when unemployment figures make uncomfortable reading, these are just some of the factors that could push gold prices up.

Some speculators even go as far as to consider gold pricing to be strongly linked to the fortunes of a political party, and there is some statistical evidence to support this line of thinking.

Taking everything into consideration, the bottom line would appear to be that whoever wins the keys to the White House, the price of gold is likely to go up. By how much, would probably be dependent on a number of crucial factors, such as who gets in and how markets react to their appointment.

History shows us that the price of gold will often rise in the days following a US election, by how much, will mainly depend on who wins the vote to govern.

Is There an Opportunity to Invest in Marijuana?

This really isn’t your father’s investment market anymore.

Not even close, as alternative investors veer off the well-worn path to pour billions into hazy hallucinogenics, otherwise know as the legal marijuana market.

By and large, the U.S. cannabis market is defined as “markets composed of individuals who legally consume marijuana as allowed by state laws, together with the businesses that constitute the supply chain to serve those consumers,” according to ArcView Group, an investors network firm located in San Francisco.

ArcView releases a regular report on the U.S. legal marijuana market, entitled “State of Legal Marijuana Markets”. In its most recent version (the fourth in the series), ArcView details the burgeoning, yet potentially explosive growth of the nationwide cannabis market, a trend that deserves to be on the radar screen of all alternative market investors.

This from the study:

2015 was another watershed year for the legal cannabis market. National legal sales grew to $5.4 billion up from $4.6 billion in 2014, fueled by explosive growth in adult use market sales, which grew from $351 million in 2014 to $998 million, an increase of 184%. Demand is expected to remain strong in 2016 with legal markets projected to grow to $6.7 billion, a 24% increase over 2015.

And this:

By 2020, legal market sales will grow to $21.8 billion, with adult use sales comprising nearly two-thirds of the total market.

Widespread usage of marijuana is imminent, and in a big way. In 2016, 86% of Americans live in a state that allows some degree of legal cannabis use, including CBD-only, medical and full adult use, ArcView says. “The wide exposure of the majority of Americans to evolving cannabis laws has been instrumental in shaping the public’s increasing acceptance of cannabis.”

If all U.S. states were to okay legal pot usage, certainly an uphill climb, even as marijuana laws grow more amenable at a skyrocketing pace, growth would be accelerated. According to ArcView, the nationwide cannabis market would be valued at over $36 billion, if the herbal drug were legal across the country.

New Cannabis Trading Platforms

Some Wall Street veterans are already climbing aboard the cannabis bandwagon.

Two experienced Wall Street hands are rolling out Amercanex Corp., an electronic cannabis-trading platform that handles sales of about 100 to 150 pounds of weed a week. Richard Schaeffer, former chairman of the New York Mercantile Exchange, and by Steve Janic, a long-time Wall Street veteran, are at the helm, and business is already brisk. According to industry figures, Amercanex’s 20,000 seats are going for $20,000 apiece, up from $2,500 when the exchange opened.

The exchange currently has 20,000 seats, which originally sold for $2,500 apiece, but now go for $10,000.

Additionally, in early 2016, Sohum Shah, a 26-year-old University of Arizona college graduate, saw his fledgling Cannabis Commodities Exchange hit the investment market pipeline. While that trading platform operates only in one U.S. state (Colorado one of two U.S. states along with Washington where general marijuana sales are legal), Shah sees it expanding into other U.S. regions.

Recent Performance Tepid – But Upside In ’16?

Of course, with any potential alternative investment, caveats abound, and marijuana stocks, funds, and other vehicles took their lumps in 2015.

According to New Frontier’s Marijuana Stock Index, cannabis stocks lost half their value, as measured in the exchange. Weighed against conventional stocks, pot stocks performed significantly more poorly, down 44% against both the NASDAQ and Standard & Poor’s 500.

But 2016 has proven to be a different story.

As of March 21, 2016, Mentor Capital’s Mentor’s Cannabis Index for Value Investors has gained 22% so far this year 2016.

Analysts credit the U.S. Federal Drug Administration’s recent green-light on GW Pharmaceuticals’ (NASDAQ:GWPH) cannabidiol drug for childhood epilepsy, although indoor cultivation system experts Surna, Inc., (OTCQB:SRNA) has seen huge share price growth and rising sales, too, according to Mentor Capital.

But there is another issue in play, and it’s a political one. Mentor says the political environment is one that favors both pot users and marijuana as a valid and profitable investment vehicle.

“Because legal marijuana sales growth is largely a political reclassification from illegal to legal it is not surprising that there is great interest in the political changes this election cycle will bring within the cannabis operating and investment community,” says Mentor CEO, Chet Billingsley. “Speculations abound from Donald Trump co-opting the youth vote and weeks of air time by backing legalization once he is past the primaries, to President Obama declassifying marijuana off of Schedule 1 as a swansong during his last days. Regardless, the political mode is for greater legalization. That momentum seems to support the observed growth in the legal cannabis market, and the index, at about 400% of the growth of NASDAQ,” Billingsley adds.

Legalizing marijuana has some addition ancillary impact that can help fuel cannabis’ growth – mainly, by taking pot out of the black market and propping it in financial markets.

“Legalizing and regulating marijuana will bring the nation’s largest cash crop under the rule of law, creating jobs and economic opportunities in the formal economy instead of the illicit market,” says DrugPolicy.org, an industry advocacy group that supports legalized marijuana use across the U.S.. “Scarce law enforcement resources that could be better used to protect public safety would be preserved while reducing corrections and court costs. State and local governments would acquire significant new sources of tax revenue from regulating marijuana sales.”

Wall Street insiders agree.

Cannabis can be a “good investment opportunity”, as long as marijuana stocks and funds are mixed into a diverse investment portfolio, and is earmarked for “no more than 10%  of the entire portfolio”, explains Jim Fitzpatrick, a board member at Kodiak Capital Group, LLC in Newport Beach, Ca.

“Green Gold” In Nascent Growth Stages

As an alternative investment vehicle, marijuana is just getting started, and that incubation period is worth noting.

Given that the vast majority of marijuana companies trade in the over-the-counter markets – which, expert say, are historically under-regulated and overly-risk sensitive – early investors would do well to stick to the handful of publicly-traded firms to break into “green gold” investing. (MarijuanaStocks.com offers a handy list of cannabis investments here.)

Plus, opportunities to invest in cannabis-related funds and ETFs are scant, although expect some to sprout up as marijuana continues to be legalized in more U.S. states.

Past all that, the key for long-term growth is clear – have enough states legalize the drug and force federal legalization soon after, which would bust the pot market wide open. Some analysts think that could happen sooner than you think.

A new study by Ackrell Capital predicts Uncle Sam will legalize cannabis by 2020, thus ushering in a huge new era of growth where the domestic marijuana market would be valued at $100 billion by 2029.

“We believe that it is a question of when – not if – the federal prohibition on cannabis will end,” Ackrell noted in its study.

Until then, do your research and proceed cautiously into what Ackrell calls the “Green Gold Rush.” No doubt, opportunity is abundant in the cannabis market, but it’s a market that’s going to need some seasoning first.

Understanding and investing in the Blockchain

In the past couple of years the term “Blockchain”, has been thrown around. As of late it’s becoming much more mainstream and something that’s of interest to both private investors and lay people alike. There’s been a lot financial professionals touting this as the next big invention, a paradigm shift similar to what the Internet did to the world.

Let’s get down to what a blockchain actually is. Simply put it is a certain kind of digital database (or ledger) that is able to store transactions. But there is a multitude of ways it differs from the traditional type of ledger.

  • From a financial standpoint what it does is stores transactions in the form of a digital block, each subsequent and preceding block references the prior one.
  • Each block that represents a transaction is only added to the entire chain if it’s been verified through cryptographic algorithms done through using a significant amount of computing power. This verification process is integral to the uniqueness of the system and crucial in eliminating any possibility of fraud.  Basically, it means that a block cannot be altered. Here’s why this is important.
  • This entire database is distributed which means that all users know when there has been additions to the blockchain. The public distribution of the ledger makes it both transparent and decentralized.

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A real world example of the blockchain technology at work is bitcoin. In the most pure form the blockchain records bitcoins that have been owned and each individual transaction of the cryptocurrency through a vast range of computers, as opposed to it being centrally located in one ledger. This technology has caught the attention of many large banks.

Wall Street Getting in on the Action

A great selling point for the blockchain is that it does away with the middleman in a transaction. It makes transactions faster and less expensive compared to the current systems being used.

Banks Like Goldman Sachs want to adopt this system to use with regular currency as opposed to just bitcoin. The blockchain can be instrumental in issuing shares and tracking banking and payments across the board. There is even more potential beyond regular currency as a lot of analysts see the blockchain being utilized in other areas aside from finance.

The blockchain has the potential to redefine a myriad of varying industries. There’s the possibility to be able to track voting systems, automobile registrations, and even securing academic records.

At its core, blockchain is a chance to bypass a lot of the bureaucratic mess in multiple industries. There comes a point when more resources are dedicated to the process itself than the actual transaction. It goes back to cutting out the middleman and allowing for more transparency and efficiency.

Blockchain Companies

Not only are these big banks adopting the technology, they’re also investing in companies using the blockchain as the crux behind their business. For example, the New York based Digital Asset Holdings released a statement in February, 2016 that Goldman and IBM recently raised $60 million in their latest round of funding for the company.

Digital Asset Holdings began in 2015; its purpose is to develop software that uses blockchain to trade established financial and digital assets. The purpose of their technology is to make the entire process quicker and cheaper.

The company has already announced that it will be developing the technology for the Australian Securities Exchange (ASX). This is a great first step for the technology to gain even more mainstream recognition. Not to mention it is going show an even greater proof of concept for anyone out there wondering about the validity of the tech.  Companies like these are going to be avenues for investors to get in on the action.

How to Invest

There are a couple ways for private investors to get involved with investing in the blockchain.

  1. For those who of course have the capital and know how, angel investing and funding in startups will be the best way to get in on the ground floor. Investing in these startups built on blockchain technology have some risks, but with greater risk the reward grows. Cryptocurrency has become an accepted form of payment in the past couple of years and entered many mainstream businesses. The amount of investors and entrepreneurs interested in this area has grown at an incredible rate. There is without a doubt a potential Google or Apple in the midst that will lead the blockchain revolution.
  2. Another simple way to get invested is to just buy bitcoin. There are multiple reasons behind this. One is the fact that it can be seen as a sort of digital hedge, similar to gold and can have a potential high return on investment. It’s a new type of asset class that a lot of people are still getting used to so there is of course going to be periods of high volatility. There are multiple ways to acquire bitcoin now. For those looking for their own type of virtual bank, there is Coinbase and Circle to just name a few. These act as both an exchange and a bank. There is also another option that allows the user to trade between other bitcoin owners. Local Bitcoins, is for individual traders and can allow for a slight variation of cost per bitcoin, there’s more of an inherent risk here, but another decently safe option.

The best website to utilize for the price per coin is the blockchain info website.

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3. Another roundabout way to get invested in blockchain technology is to just invest in the banks that are funding blockchain companies or utilizing it. Specifically there are some funds out there that shares can be bought in. An example of one of these funds is Bitcoin Investment Trust (GBTC), which holds bitcoins to track the price, similar to how the (GLD) gold trust works.

Barry Silbert started the trust, a member of Digital Currency Group, a group that invested over seventy-five bitcoin and blockchain based startups. They just recently bought up the blockchain news website CoinDesk.  Silbert said his main reason for starting the trust was so that a lot of casual investors could get into bitcoin without having to figure out where to buy it and store it. He considers it an easy play to get involved in the blockchain industry.  The trust is up some 20% since it began trading in May of 2015..

Accounting Aspect

Not only is there a great investing opportunity to be had, but there’s an opportunity to be able to utilize the blockchain through simplifying accounting and saving potential billions for various companies.

Accounting and auditing are large costs throughout the world of business. Utilizing blockchain accounting would be effective in cutting a business’s costs. All internal transactions would be entered internally. With this the ability to be audited by outside regulators would be simple as the entire process of transactions is recorded and available for viewing.

Additional Resources

Once the fundamentals about blockchain are understood, then it’s time to go down the rabbit hole and learn how to utilize the technology and the potential implications behind it. There’s no better way than to read books written by the professionals on the matter.

The first book of interest in Mastering Bitcoin by Andreas Antonopoulos. Antonopolous is a consultant to multiple bitcoin based start ups. He his a professor at the University of Nicosia, where he teaches courses on Digital Currencies. On the side he runs his own bitcoin podcast.

His audience he’s targeting is for programmers out there. It helps aide them in the process of the actual code behind the working mechanisms of a cryptocurrency. As well as how to use them and develop software along the blockchain. For non-programmers, there’s a lot of knowledge not pertaining to code that explains the technologies in more depth.

Another book of note is The Science of the Blockchain written by author Roger Wattenhofer. He’s a professor at ETH Zurich and formerly worked at Brown University and was involved with Microsoft Research.  He’s a prolific writer who has published over 250 articles on the science of cryptocurrency.

He goes through the route of explaining the systems through the scientific method, starting from the basics of building the systems. He also shows the different ways algorithms are created for the sole purpose of developing a blockchain.

For those out there more inclined to the financial and economic aspects of bitcoin, Blockchain: Blueprint for a New Economy by Melanie Swan is a great book. Swan is the founder of the Institute for Blockchain Studies. Their sole purpose is to look at the implications inherent in spreading the decentralized technology.

She decided to write the book when it became intuitive to her that blockchains were more than just a new way to utilize digital currencies but a new era akin to the advent of the computer and Internet age. Everything will be more secure as well as private, while being traceable at the same time. It sounds like a paradox but that is why blockchain is so important.

Blockchain is ushering in the new age that will allow for large-scale global projects to be undertaken that just weren’t feasible under the current models that currently exist.  It is an alluring investment that will pave the way for the future.

Is Bitcoin the New Gold?

Gold prices took a pummeling while stock markets rode the crest of a wave. But, based on the traditional view held by a number of investors, that the precious metal is best used as a hedge against inflation and when a safe-haven is required against falling prices, you would have expected gold to stage a rally when markets entered choppy waters.

The fact that the gold price has failed to shine and recover its value as rapidly as it has done in the past, when faced with a similar economic scenario, has prompted some analysts and investors to ponder whether the role of gold has changed, in the face of competition from other investment options such as digital currencies like bitcoin.

Interesting parallels

If you track the historical progress of bitcoin and gold prices, there was a period of about four years between 2008 and 2012, where values ran virtually in tandem, in an upward trajectory.

Although the price movements associated with bitcoin were more erratic than the gold price fluctuations at times, they both managed to end up in a similar state of popularity with investors. What happened after that period of virtual cohabitation in the eyes of market watchers, was that gold fell out of favor and bitcoin values managed to virtually triple in value, while gold prices dropped 25% in the same timeframe.

Too early for conclusions

We all know the problem with statistics and you can often make them work for your argument if you pick the right way of looking at a situation, and choose a period where the figures work in favor of your opinion.

It would definitely be wrong to assume that investors are now prepared to flee gold markets in favor of a new kid on the block such as bitcoin, which is what it is when you consider how long gold has played a part in our financial thinking.

The impact of QE

A major factor that heavily influenced gold and bitcoin rallies, was the monthly intervention of the Fed with their quantitative easing (QE) program.

Although there is an argument to support why the Fed intervened in such a big way, their actions did have the effect of undermining the perceived value of national currencies and also hinted that inflation could easily get out of control, without QE.

What happens with an action like QE, is that it doesn’t create the same response as more traditional monetary easing policies achieve. QE is not very effective in boosting aggregate demand or commodity prices, but can impact asset prices.

This form of intervention has proved to have a negative influence on gold prices.

Are bitcoins similar to gold in this respect?

Using this line of thinking and seeing what effect QE had on gold prices, you might reasonably think that bitcoins could be just as vulnerable to downward price pressures. Bitcoins and the concept of digital currencies in general, have certainly gained some credibility, and there are investors who are now prepared to view bitcoin as a viable alternative to gold, when looking for an instrument to shelter against a decline in the value of paper currencies.

A rise in the popularity of bitcoins has helped fuel a growth in demand for the digital currency, which in turn,  has helped to boost the price accordingly.

In terms of deciding whether bitcoin is truly the new gold, it should be remembered that the bitcoin market is still thinly traded and largely unregulated in comparison to the established gold market.

This means that sentiment and prices could just as easily swing away from the digital currency and the conclusion has to be that whilst it can be a useful instrument, it could be a risk conclusion to reach that bitcoin is about to replace gold as the default safe-haven in times of trouble.

7 Principles of Investing After Retirement

Once you have retired and have more time on your hands in theory, your risk-profile and strategy will almost certainly adjust in order to look at ways of making your money work as hard as possible, but with a view to generating income to boost your retirement income.

The fundamental point about investing after retirement is that you are speculating to accumulate with a pot of money that represents the main body of your financial wealth. It is a sum of money that you have worked hard to grow, and now that you reached a point where your income is going to be limited in comparison to when you were working and earning regularly, you can’t afford to take too many risks with your capital.

So just what are the basic principles that you need to try and adhere to for investing after retirement?

#1 – Review your portfolio

The message to keep in mind is that it is going to be extremely difficult to earn back your nest egg without the support of a steady monthly salary.

Your primary goal is to invest as wisely as you possibly can.While you are still in work and investment markets suffer a downturn, causing the value of your holdings to drop, you have a number of options open to you, such as working longer and postponing your retirement until the situation recovers.

When you have made the leap into retirement and quit your job, you no longer have that option available, unless you try to get back into regular employment.

As you probably don’t fancy the idea of going back to work as a viable option, the sensible approach at your retirement would be to conduct a review of your existing portfolio as your first priority.

You will want to take a look at how balanced your investments are and whether you are exposed to more risk than you are comfortable with in certain areas.

#2 – Work out how much you need

You will need to work out how much money you need each month and calculate an annual total income that you require in order to be able to pay all of your bills and have enough money to live on and do what you want to do in your retirement.

As a guide, if you were able to limit your drawdown to no more than 4% of the total amount of money you have available in your retirement pot and then draw a similar sum each year thereafter, with an adjustment by the rate of inflation, you should be able to live off your savings at this rate for about 30 years without depleting your savings.

Conduct a review of all of your investments and decide how much you can afford to withdraw each year and whether this balances with your needs. You should also take a look to see if your current investments provide a balance in relation to growth, safety of your capital and income generation, that you are comfortable with.

#3 – Plan for the future – even in retirement

An elementary mistake that a lot of retirees tend to make is to view their portfolio with an element of finality and this makes them too risk-averse and unwilling to look beyond their current financial position.

Many of us are living longer than ever before and although none of us know exactly how long we have, the truth of the matter is that many retirees can actually devote more of their savings to growing their money through alternative investment and stock market strategies than they think they should at first glance.

If you retire at about the standard age of 65 years, the majority of financial experts are of the opinion that you can safely afford to allocate half of your assets in sensible alternative investments and stocks and the rest in a mixture of bonds and cash.

This is a much higher figure than many of us would probably be comfortable with initially, but when you look at the potential difference it could make to your retirement income, it is an investment principle that is certainly worthy of your consideration.

You can also then adjust the percentages as you get older, so for example, you should probably consider adjusting the ratio to something like around 37% of your assets in stocks and alternative investments five years into retirement, and so on.

#4 – Understand your investments

There are now many more ways to invest your money than ever before and you are no longer limited to stocks, bonds and mutual funds.

You can invest in alternative investments such as intellectual property rights, REITs, Gold ETFs and collectables and wine, to name just a few alternative investment opportunities.

Not all of these investments will be suitable for your risk profile or circumstances, but if you work on the basis that risk can arise from not knowing what you are doing or investing in, make sure you understand all of the investments you have and know what the risks and rewards are.

#5 – Diversify your investment mix

Work on the basic calculation that you have somewhere between 15 and 30 years of living expenses in retirement that needs to be generated from your investments.

Adopting this mindset should encourage you to diversify your investment mix and combat the effects of inflation as well as addressing the possibility that you could potentially outlive your money if you don’t consider some riskier strategies, within reason.

#6 – Generate income

You are going to need income as a retiree of course, as you don’t have a month salary to rely on to cover your living expenses.

Alternative investments offer you a viable option of generating an income without relying on the traditional investment classes such as stocks and bonds. As with stocks, there are a variety of different alternative investments which have varying levels of risk attached to them.

You probably don’t want to expose yourself to volatile investments but there are a number of perfectly plausible alternative investments that could prove worthy of inclusion in your portfolio and generate a decent income, without putting your capital at great risk.

A good example of this would be investing in infrastructure and property funds which provide you with exposure to real assets while also generating a worthwhile income at the same time.

#7 – Keep some emergency funds

It is a good idea to try and set aside up to two years of living expenses in cash. Having some money that you can get hold of easily in an emergency situation will protect you from the need to sell some of your riskier investments at a loss and cover you for a period of time if you are falling slightly short of your income generation target.

Follow these seven investment principles after retirement and you should hopefully be able to enjoy some lazy days on the beach, without worrying about money.