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Dec 18

Fine wine investment: Expert advice how to end up with the best of the bottles

Posted by at 11:14 | Default | Comments(0) | Reads(1340)

Alternative forms of investing are becoming increasingly popular and fine wine is one of the best ones to try. You can start investing with as little as $10,000 and can see some healthy returns on your investment. Figures show that fine wine investments outperformed many stocks and shares over the last twenty years.  To ensure you make the right decisions and purchase the right wine, follow these tips:

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•  Settle on a budget range
It is generally agreed that you need a minimum of $10,000 to start investing in fine wine. This will be enough to allow you to purchase the quality wines which go up in value. However, as with any investment, it is essential not to invest more than you can afford to lose.

•  Only invest in top quality wine

It is far better to buy one bottle of excellent quality wine than to purchase ten bottles of mediocre wine. The better the wine the more it is likely to increase in value, the easier it will be to sell on and the better your returns will be. The best wines are French, from the Bordeaux, Burgundy and Rhone regions and these can be the safest products to invest in, particularly for beginners.

•  Check prices and only consult with expert merchants
The price of a bottle of wine will vary between suppliers. It can make a big difference to what you are able to purchase with your available funds and it will eat part of your profit before you have made any! Merchants are generally more reliable but you should be wary of all middle men. It is best to do your research and check the online price comparison sites to ensure you are not paying over the odds for your fine wine investment.

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•  Medium term investment
Wine investment should be seen as a medium term investment.  Ideally you should look to invest for at least five years. Like any market, the price of wine will fluctuate, but history has shown that fine wines repeatedly provide a good return on investment over a five year period.

•  Pay close attention to storage
This is an exceptionally important point when dealing in fine wine investment. The best wines need to be stored in carefully controlled conditions. The best place to do this is in a bonded warehouse; these are storage facilities which are guaranteed to maintain the right level of humidity, temperature and air quality. This will ensure your wine matures properly and it holds its value as other investors will know it has been properly looked after. Keeping it in a bonded warehouse will also stop you from being able to drink your investment!

•  En primeur wine – take caution when buying en-primeur
It is possible to buy a wine before it has fully matured and is bottled. However this is a more risky prospect. Wines which are still in the barrel may not be ready for another two or three years and the quality may not be as good as hoped. It is possible to pay much less than the anticipated market value for an en primeur wine, however, if I does not reach the expected quality level your funds may be wasted. If you do feel this is the option for you, be sure to use reputable companies to purchase the wine through.

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•  Tax benefits
There are several potential tax benefits to investing in fine wine. One of which is associated with the fact that wine is seen as a depreciating asset; it has a limited shelf life. When you start investing in fine wines you should contact a tax specialist or maybe deal directly with a wine investment fund company who can advise you of the best tactic for minimizing the tax due; it can make a significant difference.

Whatever you do just make sure to seek advice when investing in wine. Don’t buy single bottles and don’t buy from people claiming to hold rare Bordeaux. It is extremely easy to get scammed in this business. Fortunately, if you choose to consult with a skilled wine merchant before spending any money, there are chances to see great profit.


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