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Invest in Red Wine for the 21st Century
Investment is a tricky subject to get right. Many people will provide advice on the best property, stocks & shares, government bonds or even art to spend your money on and be almost guaranteed a good return. There are not so many people who would recommend red wine. However, new research released by academics from the University of Cambridge, HEC Paris and Vanderbilt University in the states indicates that red wine has potential as an investment.
For those who know quality wines and can pick the right ones could have earned annualized returns of 4.1 percent on red wine between 1900 and 2012. This may not compare to the return on equities but it is better than cash, government bonds, art or stamps. This allegation could come as a surprising fact, but it is backed by a significant amount of research. The following will provide a brief insight into the finest wines with the most potential for investment in the 21st century:
In 1855, Napoleon commissioned a list of the top sixty Bordeauxs to showcase France’s expertise at wine making. This classification list is still used today and the wine included on this list is guaranteed to have come from a vintage vineyard. These wines have already established a good second hand market which ensures that any wine on the list is worth investing in. Bordeaux has a few more recent arrivals which also have something to offer the discerning investor. Latour, Lafite-Rothschild, Margaux, Mouton-Rothschild and Haut-Brion are all good chateauxs. There are also several good merlot-based wines such as Le Pin, Petrus, Lafleur and LaFleur-Petrus which have great potential for investors.
Grand cru wines are possibly some of the most famous in the world. They are not traded on the market often but they command a price far greater than any other bottle of wine. This is because they are only ever made in small quantities which are snapped up on their release. These are excellent investments – if you obtain the capital to purchase a few. A list of the world’s most expensive wines would be dominated by the Grand Cru’s. The best Grand Cru’s are from domaines; de la Romanee-Conti, Henri Jayer, Comte Georges de Vogue, Georges Roumier, Armand Rousseau, Leflaive, Leroy, Meo-Camuzet and Coche-Dury.
It is rare to be able to sell a Rhone Valley wine in the same price bracket as a Burgundy or Bordeaux. This does not mean the Rhone Valley wines are not good investments. Some of them have a lot of potential. The most notable are from Jean-Louis Chave – the Cuvee Cathelin and Vin de Paille. Chateau Rayas offer top end Chateauneuf du Pape which are also a good buy whilst La Landonne, La Turque and La Mouline offer excellent investment opportunities.
The super Tuscans which includes greats like Sassicaia, Solaia and Ornellaia are amongst Italy’s best investment wines. Tuscan classics such as Brunellos from Fattoria Poggio di Sotto, Casanova di Neri and Gianfranco Soldera have shown excellent potential on the investment market. As has the Vino Nobilo wines. Piedmont adds wines like Monfortino, Cascina Francia and the Montprivato wines to the investment portfolio.
American Wine and Australian Wine
America is the dominant force behind investment wines. Unsurprisingly, most of them come from the sunshine state – California. These wines are produced in very small quantities and are rarely seen on the secondary market. Napa Valley Cabernet Sauvignons are always high on the list and represents an excellent investment opportunity. Sonoma County’s Verite winery produced three distinct wines which have climbed consistently over the last few years.
There are only a handful of wines from Australia recognized as having investment potential. Penfold is one producer that has seen its wine consistently increase in value. Jim Barry’s The Armagh and Mount Mary’s Quintet are two other wines which are worth considering as investment opportunities.
Believe or not, investing in fine wine can be a profitable business idea. However, you must be smart and have a closer look at the market. It looks like red wine has great potential and according to recent news, it might turn into the best investment idea of the 21st century.
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By William Taylor and WineInvestment.com!