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May 2

Considering making the jump into the fine wine investment – follow these guidelines

Posted by at 10:40 | Default | Comments(5) | Reads(1025)

Wine investing is not just about storing a couple of bottles in your basement. Avid investors must understand the product before spending any money. Nearly all investments involve top quality wines from top regions like Tuscany, Bordeaux, Rhone, Burgundy and Champagne. Bordeaux is on top, although the other 4 are also growing in popularity. According to Cavex, which is a reputable wine trading platform, Chateau Rothschild (two cases from 2005) has been recently traded for $6,566. In the meantime, four cases of Burgundy (Ponsot Morey St. Denis Alouettes) from 2009 have just exceeded $440 a bottle.

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Wine investing – an excellent way of diversifying your investment portfolio

Novice investors looking to make the jump and buy wine to diversify their portfolio should think beyond the product itself. Procuring quality wine and having it stored in proper conditions can be a challenge. WineFolly mentions that storing wine professionally begins at $18 a month (per locker with a capacity of 7-9 wine cases). For most first time investors, that should be more than enough. But if you want to expand your business and outgrow your stock you need to be careful. Additional expenses involve broker fees, insurance, and trading exchange fees on Liv-ex or Cavex. Last but not least, there’s the wait. Fine wine is not your average type of commodity that renders fast returns on your initial investment. Investors should be prepared to wait between 5 and 10 years before they can see profit.

Be aware of the risks involved

Just like all other investment types (stocks, bonds, real estate), wine involves taking risks as well. Even though the market for top-quality wines has been finally stabilized in 2013, things used to be shaky. China is starting to gain an interest in fine wine from Europe, thus triggering a boost in the world’s most famous roses. But then again, wine prices are often affected by unforeseen factors like weather, storage and reviews from wine critics. An investment can be risky for novices because of their lack of experience in spotting a scam. Wine fraud is quite common nowadays, and it usually revolves around selling counterfeit wine.

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And yet, wine enthusiasts and committed investors are not afraid of this factor. The wine market can be incredibly profitable too; you just have to know and understand it before spending any money. The world’s most looked after vintage wines provide an interesting chance to explore the industry even more. Beginners may have difficulties in getting a “feel” of the wine market; and yet, if this is your passion and you dedicate to this type of investment, then it shouldn’t bother you that money was not made – you can always drink your wine.

Adhere to basic principles when investing

If you’re 100% certain that you want to diversify your portfolio by investing in wine, then you should adhere to the following principles:
•  Focus on Bordeaux from the following years: 1982, 1990, 1996, 2000 and 2003.
•  Purchase wines with a score of at least 96 from 100 (Robert Parker)
•  Avoid hyped boutiques that are in trend; even though they have a good reputation now, you never know what can happen in the future
•  Avoid New World wines from countries like Australia and the US; these don’t have an established wine market
•  Make sure your wine cases are properly stored; adequate temperatures and humidity levels are fundamental and can only be attained in controlled warehouses that are fully insured.
•  Insist that your product is stored under your name (or the name of your company) and opt for full replacement insurance.
•  Purchase wines that haven’t been shipped or traded before; this way you are sure that the quality of your initial investment is maintained in excellent condition.

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Making money with wine and breaking into the fine wine market can be a challenge. However, the more determined you are the better chances you have to make a good profit. Patience is fundamental when investing in wine. Knowledge is equally important. Stick to basic wines if you’re a newbie and don’t hesitate to consult with an experience and certified wine merchant to help you out. These are basic guidelines but crucial for your initial investment to pay off in time.


AryanIzaiah Email
2019/06/23 18:52
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Cynthia Orion Email
2019/08/08 14:48
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jessaminezara Email
2019/09/02 19:06
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2019/09/06 15:26
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Michael Email
2019/10/17 20:33
This is actually worth considering. Wine business is a good investment nowadays.
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