Hop on the internet and do a quick search for “wine/whiskey investing mistakes” and you’ll get about a million hits.
But in all the pages and pages of advice, there is one glaring omission.
It’s perhaps the single biggest mistake nearly everyone makes at some point.
It’s also highly avoidable.
Indeed, this mistake trips up investors in all markets. Can you guess what it is?
Yes — as the saying goes, “Confidence is good, but overconfidence always sinks the ship.”
Now, overconfidence in wine and whiskey investing could mean a couple of things…
Let’s look at a few of the ways investors act overconfidently and put their liquid profits at risk.
Don’t Rely on Another’s Expertise
Naturally, you’re at the highest risk of making this mistake when you’re just starting out, but you can fall victim to this classic blunder anytime — especially if you’re venturing into unfamiliar territory. Looking to buy Burgundy, for example, when you’ve dealt primarily with Bordeaux.
To avoid being taken for a ride, be sure to take enough time to do thorough research and find reputable sources…
Always ask questions when you’re unsure…
And remember never to blindly take anyone’s word as gospel, particularly if they’re trying to sell you something.
An easy way to keep from relying too heavily on another person’s expertise is to get a second opinion. And if you’re still not satisfied, there’s nothing wrong with getting a third opinion.
Going After Killer Profits — Every Time
Incredible deals are definitely out there… It’s a thrill when you snag a bottle or barrel for a song and realize a tidy profit.
If you do it right out of the gate as a new investor, it’s an even sweeter feeling.
And victory tastes even more delicious if you get on a lucky streak and have a handful of windfall wins in a row.
It’s easy to start believing you’re some sort of savant — that you know how to pick them and can continue doing so.
But it takes time to learn the ins and outs of any investing strategy so you can select the best opportunities with care and precision. Doing it once or twice in a row doesn’t mean you’re an expert — or that you’re going to be able to do it consistently.
Basically, don’t get too big for your britches if you get lucky right out of the gate.
Believing Anything Is a “Sure Thing”
If anyone ever tells you something is “guaranteed” or “in the bag” — or you get caught up in a moment of genius and decide so yourself — proceed with caution.
Many a wine investor has been left disappointed — or empty-handed — after buying a bottle or barrel on the inflated belief it will be a “sure hit” in the market.
Instead, make sure you understand (and realistically consider) the best and worst possible scenarios before buying. And never, ever invest more than you can afford to lose.
There are so few certainties in this life… and the prices of wine or whiskey aren’t among them.
Failure Is Inevitable
One thing that is certain… No matter how hard you try, you will make mistakes. It’s part of gaining experience as a liquid profits investor.
Mistakes can even be some of your best teachers.
That said, cocky errors can be exceptionally costly. There’s a reason so many parables warn against excess pride.
The good news is these sorts of mistakes are easy to avoid if you’re honest with yourself about what you do and don’t know.
Taking the time to learn the ropes… working with a mentor or reputable company… starting slowly and establishing your process…
These are the best ways to build real confidence — confidence that comes from amassing the skills and experience necessary for lasting success.
Lucille St. John
Managing editor, Unconventional Wealth
P.S. One of those reputable companies like Lucille mentioned is Cult Wines. They have the resources and experts to help you get started investing in fine wine.
And not only will they teach you everything you need to know to tap into this profitable market, but the folks at Cult Wines can also help with portfolio management, valuations, wine tasting events and more.
Lucille St. John
Lucille St. John is the managing editor of Unconventional Wealth. A gentlewoman and a scholar, Lucille never received much in the way of a financial education. But what she lacks in fiscal knowledge she makes up for in taste.
She’s going to take you with her on her unconventional wealth journey — starting from...