Asset Trip with Anthony Zhang: A Serial Entrepreneur and Wine Investor's Non-Traditional PortfolioVinovest's CEO talks about wine as an asset class, investing to support his entrepreneurial endeavors, and why the traditional 60/40 portfolio is a thing of the past.
Oct 5, 2021
It's important to have a good grasp of traditional markets going into alternatives, but once you have that grasp, you don't need to have most of your money in traditionals. The 60/40 stock/bond portfolio construction is definitely getting phased out. If you're not taking advantage of [alternatives], you're missing out on so much wealth.
CEO of Vinovest
26 years old
Culver City, CA
Big Ws & Ls
First Investing Platform:
Investing in a wine later voted #1 in the world
Startups that folded
Favorite Platform for Crypto:
Favorite Platform for Stocks:
So to start off, can you talk a little bit about how you invest? What do you invest in, how do you allocate your assets and what is the reasoning behind that?
Yeah. So, I founded two companies and sold both of them, and now I'm working on a third company, which is a FinTech platform for investing in wine. After I sold my first company, I got a financial advisor and started investing in all the sort of vanilla stuff, right? Your stocks, your bonds, a little bit of real estate exposure. But at the time, I was 22 years old. I thought “this is super boring, I don't want to invest like that for the rest of my life”. So I started looking into alternatives and got really hooked into both crypto and startup investing. Now I angel invest a pretty small part of my investible assets, like 5% to 10%. And then crypto has grown into a pretty large part of my holdings because I just worked in the industry for the last three and a half years.
It was through crypto that I started to learn more about other interesting asset classes. I remember just Googling, "what are the ultra wealthy investing in these days?" And you had art, fine jewelry, classic cars, and wine. Wine has always been my passion, so I thought that was super cool, I'd love to be able to try to invest in wine, but I realized that it was a lot harder than it looks because A) a lot of these wineries are super exclusive, and even if you have the money, you can't get access to them. And B) the whole storage component, logistics, etc. You know, most people can't just dedicate a whole room to shipping and storing wine, and I couldn't either. So, that's why I started Vinovest, and that's why I started investing in wine.
The reason I invest in wine is because it's really stable. It has about a third of the volatility of global equities, and it's actually outperformed global equities over the past 30 years. So it's something that not only can get you strong returns, but strong risk-adjusted returns. It's a physical asset. It can't really be reproduced. You can't go back in time to the year 2015 and produce more of a particular wine, even though a lot of people love it. It's one of those assets that are always decreasing in supply and increasing in demand because people love to drink older wine rather than younger wines. So for those reasons, I felt like wine had really strong fundamentals and also complemented my pretty large exposure into crypto, which is on the other side of the spectrum, super, super volatile.
And can you talk a little bit about roughly how those assets are divided up? For example, you have most of your assets in X, a small amount in Y, and how that allocation supports your investing style and goals.
I'd say like 60% is still in some stocks. About 25% or 30% in some crypto. I've got another 10% or so in wine right now. And the rest is real estate or startup investing.
And what are your investing goals? Are you mostly investing for long-term retirement? Are you investing for passive income? Do you have any short or mid-term goals?
I want to be able to invest with a very long-term goal. I'm not retiring anytime soon, but I want to be able to have my money work for me, especially now that I'm founding another company. Most of my hard work and net worth is tied into the equity component of the company, not necessarily the cashflow part of it. I want something that even if I didn't get paid anything at this company, I'll still be able to make more money. So that's really what I'm looking for. I'm not really looking to sell anything anytime soon, which is why I've chosen very long-term approaches. With [my] real estate [holding], it's at least five years. I started angel investing, which is at least 10 years. Wine, which is at least five years. And then crypto, which—you can choose a strategy inside crypto—but I usually am not looking to day trade.
Interesting. So your investing, in addition to providing you with long-term growth, is also supporting your current career moves. How did you get started investing, back before you started investing in crypto and wine? What was your very first investment? How old were you?
I want to say probably when I was a teenager, just paper trading to start with. And then when I turned 18, opened up my own account and started investing right out of the gate as a freshman in college.
And why do you think you were able to get started so early? I know a lot of people don't get started until their mid to late twenties. Did you have people in your life who talked to you about investing early on, or were you just the type to take your own initiative?
I've always just been fascinated with investing and with technology. So I would just be downloading and checking out all the new finance and investing apps, and I just kind of did it myself.
Do you remember what the first investing app you ever used was?
It's gotta be Wealthfront. It was one of my first ones at least.
Can you talk a little bit about any investing apps and platforms you use and like, or any that you've tried out and found they weren't really for you?
On crypto I use FTX. I used to work there, so I kind of have to use it now. And I think it's also the best in the market. For wine, I use Vinovest. For real estate, I usually invest in direct deals, so I don't really use any platform. And then for stocks, I still have most things managed through Wealthfront.
And do you have any advice for people who are thinking about branching into alternatives, but maybe don't have ties to something like crypto or wine? For people who don't work in any of those fields and are thinking about branching into alternatives, do you have any advice for them?
Yeah, I think you ought to just do it. I think a lot of people are maybe afraid of losing money or afraid of not fully understanding something before they dive in. I would say just start with something that you're willing to lose and then treat it as an education, throwing in a hundred bucks or a thousand bucks. You save that up and throw it into a new asset class. You're automatically a lot more inclined to learn about something that you've got skin in the game on. That's really how I started getting into alternatives, just putting very small amounts in, and then that interest kind of snowballed into me becoming a lot more knowledgeable in the space.
Can you talk a little bit about any of those early lessons that you learned when you first started getting into those spaces?
I think the main thing is having a long-term outlook, having a really steady game. Maybe half a percent or a percent every month isn't very exciting, but it compounds. I'm really glad I have money invested in more stable outcomes like those, because it gives me the flexibility to be able to play in a lot riskier assets, whether it be crypto or startup investing.
If you could go back and give your 18 year old self one piece of investing advice, what would you tell yourself?
Yup, of course. Anything related to strategy or outlook?
It's important to have a good grasp of traditional markets going into alternatives, but once you have that grasp, you don't need to have most of your money into traditionals. If you're at the stage of life where you want more exposure to alternatives than traditional investments, you should be able to do that. I feel like the 60/40 stock/bond portfolio construction is definitely getting phased out and out of date. And now everybody's allocations are much more alternatives-heavy.
Can you talk a little bit more about why you think that way? I think a lot of investors still are very much in that traditional mindset and feel that branching into any alternatives more than just to play around with them is too risky.
I mean, bonds are giving you nothing. The stock market is more vulnerable than ever. So there are plenty of options that are way less volatile, whether it be real estate or wine or you can even find interest-bearing crypto protocols and solutions that can give you a very steady, low-risk yield as well. I think if you're not taking advantage of those opportunities, you're missing out on so much wealth that you could be putting your money toward.
What are your biggest investing wins and biggest investing losses?
I've definitely lost all my money on startup investments before, where the company just folds down. I'd say that's definitely a big, big investing loss.
My biggest investing win came when my company was able to secure over a hundred cases of this particular wine, and a few months later it got voted the number one wine in the world, and the prices just skyrocketed right after that announcement. Everyone wants to get their hands on this wine that we had, that we're still holding on to. It was pretty exciting, especially cause wine prices don't move usually as fast as other asset classes. Seeing huge double-digit daily and monthly movement in this asset showed us that there can be some real exciting price action happening for certain kinds of wines or regions that are really exploding in popularity from a consumption standpoint.
Some people are drawn to alts as a way to kind of tie their interests and passions into investing and have a little fun with it. Is that something you take into account when you're looking at what to invest in—where your interests and passions lie and how fun it is?
Absolutely. I think, especially with moving away from the 60/40 portfolio, you have a lot of options on what you invest in and how those investments can reflect who you are. I'm noticing that in my friend circles more and more of our conversations are around investing. It's kind of like having a favorite sports team...what's your favorite stock, what's your favorite wine, what's your favorite crypto coin? People are extremely passionate about supporting that because they, for whatever reason, feel like it reflects a part of them. So I think passion is absolutely a part of that equation.
Take your own Asset Trip
If you're interested in investing like Anthony, you can check out these platforms:
- Vinovest: Vinovest chooses investment grade wines and authenticates, stores, and sells them for you. And, if you’d like to take a sip out of your favorite fine wine, they’ll even ship it to you.
- Wealthfront: An all-in-one financial app that lets you link your accounts to get your current and projected net worth, track your savings rate, and monitor your account activity.
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