Making fruitful wine investments
Investing in wine has become increasingly fashionable over recent years and has proven to be a relatively reliable placement for funds, if you make the right choices. Small-scale fine wine investments are particularly popular, especially with the rising demand in China and Russia.
The Internet, growing number of investment options and an increase in the amount of information and data that is available about wine are all factors that have contributed to bringing wine investments to the fore of everyone’s mind.
When we visited Château Cordeillan-Bages during the wine harvest in Bordeaux last autumn, we were told about a popular concept whereby guests gather friends and they invest in an entire barrel of a certain vintage of Château Lynch-Bages, which is a renowned Pauillac wine.
Yet investing in wine is not without its risks and Peter Shakeshaft has some key tips for readers of The Sloaney to consider before you put your money into certain vintages…
Not all fine wines will provide a good return for your investment: To be completely frank, most bottles, even well-know ones, raise a standard income, and a bit higher when they reach maturity. Only the top bottles from prestigious vineyards bring high amounts of profits, and these are not easy to get. The most secure bet is to invest in the prestigious vineyard bottles, and to be careful at every step.
Buying wine before it is bottled is risky: Numerous fine wine investments nowadays require that you buy wine before it is bottled. This is typical especially when it comes to Bordeaux wines. This kind of early investment is much more risky and you need to consider the quality, quantity, storage environment, bulk price, the maturity stage and also the year. Make sure to keep all these factors in mind before purchasing wine barrels – one bad barrel could mean a hundred bad bottles, which could in turn lead to an extravagant loss in your investment
Be careful of the country you choose: American fine wine investments may be especially difficult because the vintage producers in the US are not as reliable as those in Europe. The expertise factor that sets wine price in the US, as well as China and Russia, is not wine producer expertise, but demand. For a UK based investor, it can be harder to maintain a data bank about all the reliable American vineyards that produce exquisite wine, so things may get a bit messy.
There is always a back up plan for Wine Lovers: You need to remember that fine wine investments, similar to other sorts of investments, can simply fail to give you a standardised ROI. In such a situation, can you say that you are well prepared to set all tension aside, just sit down and enjoy a glass of wine from the bottle you invested in? If not, then you are better investing in other forms of selling and distribution endeavours, for instance gold and silver. The latest rise in prices has been attributed because of the rise in demand in China and Russia, especially for Bordeaux wine. However, to get a healthy ROI, you must work hard to sell your wine in these countries. The best option is to talk to a specialist in the field, who can help you deal with your stock portfolio. It is always vital to know which the right time is to sell your wine in China and Russia because they are not like regular wine consumers.
Peter Shakeshaft owns Vin X, which is a fine wine investment company. You can find out more online at www.vin-x.co.uk or by telephoning +44 (0)203 384 2262.
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