Three Major Steps Involved in Wine Investments

How well do you know the wine business? Are you thinking of becoming an investor? Whether you’re 20 years old or 40, it’s paramount to know wine prior to spending any money on a purchase. As a liquid asset, wine is the sort of investment that gives people diversity. Together with equities like art, fast cars, and commodity investments (silver, gold, oil), people have finally started to see wine with a different pair of eyes. To begin with, we have to point out that investing in wine is no longer an alternative type of investment. Recently defined as a commodity, fine wine is starting to become a more conventional type of investment than cars and art.

Young entrepreneurs looking to get started in this business should abide by some basic rules: never expect to make a fortune fast, be patient (you’ll reap some benefits in 5 about years, and great benefits in 10), and pay attention (to storage conditions, market prospects, and more). If you’re looking to make huge profits without taking any big risks, the best strategy is to opt for a medium-long investment. Wine gets better with age, yet that’s not a guarantee. Are you wine lover interested to make a sensible investment? Very well then; the following 3 steps are essential if you want to thrive.

Invest in functionality

Although wine is a liquid asset, it’s not liquid enough to provide real-time pricing. Specific types of wine have more profound liquidity than others. Let’s see an example: the famous Bordeaux wine is preferred by most potential investors because of its historical past. Over the years, many people invested in Bordeaux wine and ended up making great money. Everything we know so far about this type of wine can be easily proven, so there are little chances for investors to fail if they buy Bordeaux. You can also view price charts online, assess vintages, regional prices, and compare the wines using multiples sources such as the FTSE index of Liv-ex.

If your goal is to trade fine wine, the key to being successful is transparency. As an asset, fine wine is non-fungible: the buyer is the one to have the last word, always! General prices for traded and collected wines – Bordeaux in particular – increased tremendously in the 1st decade of the 21st century. Hence, the numbers managed to attract plenty of buyers (even buyers who were not that interested in investing).

Technological advances

In the wine business, it’s not always about how much you want to invest, but about the way you’re planning to invest your money. Making use of advanced technology to get started in the business is a step we just can’t ignore. Having a website for your business, making it as responsive as possible, being socially active, and updated with the latest changes, and thinking of new ways to make your investment thrive, are just a few guidelines you have to consider to have a successful business.

Has technology improved the wine production? Definitely, and as a matter of fact, it shouldn’t be seen as something new. Owners of Bordeaux Chateaux have already started to upgrade their viticultural practices. They started to invest in storage rooms and new wineries, and then they began adopting machines to help them with the harvesting process. Drones and satellite images are also at high demand because investors want to stay constantly updated with everything that happens on their properties. You may or may not have the means to make such investments, but it’s wise to be aware that advanced technology can help your future business thrive.

Authenticity and Storage

Authenticity and provenance are crucial aspects in the wine business. With millions of wine bottles circulating the market (particularly high-value wines), scammers and fraudsters are everywhere. As a new investor, it’s paramount to get informed prior to spending a dime. Blue-chip wines can only be bought in excellent conditions, so try not to buy from a stranger because you can’t know for sure if their product is genuine. After you found a trusted seller, your next step would be to store the wine in optimal conditions. Otherwise the quality of the wine will deteriorate and its value will automatically decrease.

Wine investments can be extremely profitable, even for starting entrepreneurs looking to enter the current wine market. The key to succeeding in this business is to have patience. Get to know the market really well, learn as much as you can about wine, and don’t hesitate to ask a professional for assistance. 

Wine is a Hot Investment- Invest in What You Drink

The history of wine and investment goes way longer than one could anticipate. The fine wine market has gained popularity only after the 1990s, but history has proved that wine collectors have been storing wines for hundreds of years. The past 25 years have witnessed more than 15% rise in wine investment on an average. According to experts, the past 20 years have seen best wine among the best investment options available in the market. However, it is a long-term investment and one need to give it plenty of time to grow. The impact of the financial crisis is comparatively less intense in wine investment as compared to other financial products.
 

 
If you are a budding fine wine investor, here is a short guide for getting started with the investment. 

How should you start with Wine Investment?

• Understand Wine Investments: The financial market is full of investments including commodity products, traditional products, and alternative financial products. It is necessary to be aware of the product you want to invest your money in.Fine wine investment is another mainstream investment unlike cars and the arts. These are long-term investments and offer returns in double figures or more. 
• Research the Wine Investment Industry:Every investor should do ample research about the industry before investing, and the same is true for wine investing. The wine market is driven by the extraordinary demand and limited supply principle. Compare wine investment products with other traditional ones and analyze its returns for the past few years. Keep in mind that only a few products in Bordeaux witness a significant increase in value and it are best to understand the reason behind its popularity. 
• Benefits of wine investments: The key to investing is to find out the benefits for the investor. Fine wine investments have performed very-well and offer high ROI (Return on Investment; comparatively low risk; rising prices (low supply=high demand principle); recession-proof; and status symbol. At the same time, you need to consider the shortcomings of wine investments. It includes fraud and scam suppliers; drinking it yourself; past performance does not guarantee future benefits; unregulated market.

 

• Choose a reliable wine broker: It is essential to find a reliable wine broker group or an individual. For large-scale investment, it is better to choose reputable wine broker agencies. Invest some time and find out about the history and track record of the company in wine investments. 
• Develop an investment strategy: It is up to the investor to establish requirements and expectations from an investment. Devise your own strategy including potential risks; long-term and short-term goals; potential returns; and a strategy for the portfolio. It is the investor who will lose or gain money, and it is best to avoid relying on others for your best interests. 
• Invest in stock:After developing a portfolio strategy, it is time to purchase stocks. The wine investment broker will help in choosing wine products depending upon the goals of the investor. If you are investing a large sum, prefer high capital growth options and crosscheck the options suggested by the broker. Maintain proper communication with the broker and get your ownership certificate after purchase. 
• Authenticity and Provenance of Wine: It is important to test the provenance and authenticity of the wine. With the increasing interest in the wine industry, there has been an increase in the number of scammers and fraudulent ripping off new investors.The lack of proper storage history and damaged bottle may lower the price of the investment. Make sure to receive the storage details and certificates as a proof. 
• Storage of Wine: In the end, it all comes down to the storage of wine. You can rent storage space for high-value luxury wine bottles, as it requires specific temperature and humidity level for perfect taste. A wine with an excellent storage history will attract high-end buyers and yield maximum profits. One should prefer bond storage to avoid any duty or taxes at the later stage.

 

Sell at a profitable price: Once your wine has matured, it is ready to be sold in the open market. There is no time-period attached with wine and it can be sold in any currency or market. Consult your broker for perfect market and get best results from your investment. You are ready to repeat the cycle.

Author Bio: The article is written by a well known freelance writer and blogger Jason Phillips. He divides his time among work, writing and family life. Moreover he is running a site wineinvestment.com which has a highly trained team of investment specialists.