Invest in Fine Wine
Want Good Medium To Long-Term Gains – Look At Investing In Fine Wine
Investing in fine wine can be a profitable and fun way to diversify your portfolio. If you are a connoisseur of good wine, a wine collection can be both an investment and a source of joy. Like any investment, there are risks, and your returns are never guaranteed. There have also been some cases of wine fraud, however, if you sick to some basic principles, you can avoid that from happening.
Focus on fine wine from top areas like Bordeaux and Burgundy, in France. Red wine has higher chances of seeing returns than white, although nowadays investing in both type is a sensible decision. Here are some more tips to keep your wine investment safe.
Choose A Good Wine Merchant
Take care when choosing a merchant to buy your wine from. You want to avoid unscrupulous dealers who try to boost their profits at your expense. Here are a few guidelines you should keep in mind.
- Avoid cold calls - If a business approaches you out of the blue by cold calling you or sending an unsolicited offer in the mail, be wary. These methods are often used by scammers to target unsuspecting investors. It is safest to do business with reputable companies which you research and contact yourself.
- Check their history - Look for a merchant who has been in business for years, and who has an established track record. See what other customers of theirs have to say about their dealings.
- Verify the physical business - If a merchant only has a PO Box, and no physical address, this can be a warning sign. Before handing over any money, it is best to verify the physical office of the business you're dealing with.
- Be especially careful with en primeur - When you buy en primeur wines, you are buying wine before it is bottled. The wine will not be shipped to merchants for about two or three years. This time lag makes them especially open to fraud, so it is critical to use a wine merchant with a sterling reputation.
Do Your Own Research
You may get advice on wines to purchase from your wine merchant, from a friend, or off the internet. No matter who tells you something is a good buy, you should always do your own research. There are many trustworthy sources you can check out like official wine blogs, forums and websites like the Liv-ex for instance. Quality and provenance are paramount. When you are buying expensive, investment-grade wine, the provenance is critical to maintaining and increasing its value. You need to have documented provenance, showing where the wine came from, and proving that it has been stored correctly over its life to maintain quality.
Condition and Packaging
Look at the details of the wine you are purchasing. The best way to buy fine wine is in sealed, unmixed cases, which are still in the original wood box from the chateau. If the wine has been repackaged somehow, or if the packaging has been damaged, this means the value is lower. Compare prices on the wine you are considering buying, to make sure that you are getting it at a competitive price. You can look for prices on the internet, or ask other wine experts for their opinion. For en primeur wines, the producers announce the set release price. Do not buy these wines before those prices have been published. Reliable wine merchants will not try to sell to you before that time.
Wine for investment can be worthwhile provided that you make sensible choices. After you have decided to invest, the following logical step is to secure your product. Have your cases stored in bonded warehouses to avoid VAT, and check the conditions periodically. Significant returns on your investment will happen in 5-10 years, so you should be prepared to wait.
Before spending any money, ask yourself the following question: Am I investing for money, or appreciation for the product? Wine investors are not necessarily drinkers, although it's certainly a good idea to invest in something you genuinely like; everything you will do for the course of 5-10 years to ensure your investment will be worth the wait.
About the Author
By William Taylor and wineinvestment.com!
If you enjoyed this confession, make sure you subscribe to the Confessions RSS feed!
You can also follow Confessions on Twitter.
You can also subscribe to the Weekly Confessions Digest.
- If you are a connoisseur of good wine, a wine collection can be both an investment and a source of joy, but like any investment, there are risks, and your returns are never guaranteed.
- When doing your research, verify the company actually exists, and be careful when buying en primeur wines, as these wines will not be shipped for another two or three years.
- Ask yourself the following question: Am I investing for money, or appreciation for the product? Wine investors are not necessarily drinkers, although it's certainly a good idea to invest in something you genuinely like.