Wine Investment is Risky But Can Produce High Returns

Most people who want to make an investment think twice before turning their attention to the wine market. Such investments should be about getting your money back at some point, so that’s why we’re wondering: is wine worth taking the risk? Wealthy wine enthusiasts know how to appreciate a bottle of wine, and since money is not a problem for them, they usually choose only the best wines on the market. For example, if you love wines and your budget is unlimited, no one can stop you from paying $120,000 for a single bottle. This may sound crazy, but there are many people who do this. 

A 1975 Cabernet Sauvignon is worth a high price but only a real connoisseur can know its exact value. This type of people knows what to expect, and most of them can tell from the start whether they will get their money back. Even if finding these types of bottles is very hard, you will definitely benefit from their amazing characteristics. However, everybody knows that the easiest way of generating profit is through buying low and selling high. That being said, it becomes obvious that very expensive bottles of wine will never be considered a profitable choice. 

Invest in quality wine

If you’re willing to make this type of investment in the future, it would be a good idea to look for a good wine and sit on it for at least 30 years. As long as you know its aging potential, nothing will stop you from achieving your goals (some wines should stay in a cellar for a long period of time so that they can become comestible, while others can be drunk immediately).

Bear in mind that winemaking was totally different two hundreds of years ago, and this difference can also be seen in price. For example, the New World has been invaded with fruity and high-alcoholic wines. These types of wines don’t age too well, and they have nothing in common with expensive wines. Even though there are several vintners and wineries did their best to keep their old strategies, many of them find themselves in a tricky situation: they’re forced to provide people with they want.

The maturation process of wine demands time

Wines don’t mature overnight and most of them require several years of storage before being sold for an impressive price. The problem is that not many people know how long they should wait in order to sell the wine they have invested in. The maturing process is usually influenced by aspects such as acidity, tannin, and phenol.

Besides, you should also take into account that there are plenty of wines who don’t mature as quickly as you have expected. Once the wine is placed in the bottle, specialists re-rate it. If the quality is lower than the expected one, the final price of the bottle will drop. This means that wine investments are risky, and that all the merchants run the risk of going bankrupt. This shouldn’t come as a surprise, since the wine market is crowded with fraudsters which specialize in methods of attracting all the cash invested by investors.

Unfortunately, wine investments will remain risky until specialists come up with an accurate aging forecast tool for wine. You can always hire professionals in order to test your wine, such as sommeliers. However, the best idea would be to purchase up to two cases of the wine you expect to age beautifully (when it comes to aging, the best ones are those with low acid, high tannin, and higher alcohol). If you’re not specialized in wines, a local sommelier can taste the wine and tell you whether it’s worth the investment or not.


As previously mentioned, wine investments are challenging but they can bring high return. That’s one of the main reasons why investors think twice before throwing their money on random cases of wine. The best idea would be that of starting a personal wine collection first, and invest more if you notice that things are going according to plan. Never expect to become a millionaire by investing in cheap wine. Instead of purchasing dozens of cheap wine cases, you should rather purchase two cases with bottles of high-end wine. If you’re a wine enthusiast, chances are you will never experience failure, because you’ll never regret not having sold your wine.

Wine Market Tracker Liv-ex: Why is Wine Considered a Golden Investment?

For centuries, pure gold was considered the finest and most secure investment asset. Nevertheless, things are slowly changing, and today’s most fierce competitor of gold investments is fine wine. Wines are an extremely popular investment option, and giving the current market situation and selling prices, they make a fabulous asset, nearly as profitable as gold. 

Liv-ex - the wine market tracker, has analyzed the selling and buying prices from the last decade, and discovered that the costs of fine wines have doubled during the last five years. What’s even more surprising is that they’ve not been affected at all by the economic crisis. Because of this, investing in fine wines is an extremely smart move, this being one of the steadiest, most secure, and profitable forms of investment.

People seem to be enthusiastic about investing in fine wines, are we’re not talking here about business people or experts in the business; we’re talking about ordinary people, seniors and retired persons who want to invest and stay busy. 

Fine wine is the new gold

Fine wine investments have managed to invade the market. Their prices are continuously rising, they taste deliciously, and there’s even more to come. The Wine Investment Fund assumes that the Liv-ex figures will continue to rise by the end of the year. Giving all these things, you may be wondering what makes wine such a profitable investment, and such a highly-demanded asset. Wine becomes more appealing when people are found in a relatively uncertain economic situation, and when they’re reluctant to investing their money in something that may be doomed to failure.

Government officials are putting cash into the economy from all over the world, in an attempt to boost inflation which has been rising for quite a while now, and it seems to be the main reason why worldwide investors are eager to put their funds in fine wine. The best part is that this trend is global, and it does not involve just a small group of countries. For instance, exports of Wines of South Africa, or WOSA, increased with 25%, in comparison with the previous year, counting as much as 469 liters at the end of April. 

Furthermore, if you’re curious to know from where the demand is coming from, you should know that the answer is Asia. According to Investor Ideas, Asian demand is so huge that the Treasury Wines Estates Ltd expects China to exceed the United States in the near future, and turn into the biggest and most important wine manufacturer on the globe.

Considering all these things, you’ll probably understand what determined wines to become such a precious asset. What’s even more interesting is that over the years there have appeared all sorts of permutations from the basic model of wine investment, and among the most fascinating alternatives is the fund that invests in wine-related estates, instead of classic fine wines. For instance, a notorious example in this case is the Blue Chip Winery Fund, settled in the Bahamas, and which makes use of its investment to acquire stakes in a myriad of wineries, and vineyards in various places from Canada and Europe. This is a really interesting alternative, suitable for all those who are attracted by the profitability of wine investments, but not by the liquor itself.

Investing in win should be done cautiously

In spite of the fact that the wine investment industry is doing extremely well, you should not assume that there are no pitfalls, and that everything is perfect. In reality, there are some areas where the market has cooled down lately, and the perfect example is the Vintage Wine Fund, which used to possess over $100 million in assets, and is now preparing to go bankrupt, because of a disappointing performance.

Investors must not be let down because wine investments, just like any other industry, has its ups and downs. The good news is that fine wines are considered one of the most secure and profitable investments that come along with a plethora of options to choose from. Retired persons should looking to invest should spend some more time to know the business. With the help of a wine expert, you should be able to succeed in the business and reap great benefits.

Author Bio: Jason Phillips is an investment advisor at wineinvestment.com. He advises people about the latest trends and how to invest in wine market. He is a skillful content writer as well with hobbies like playing soccer and rugby.

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.