Investing in fine wine is more lucrative than ever because of the unique nature of wine. Such as of all the wines made in the world, only a small percentage has the potential to improve with age. And of this group, only a small percentage has proven the ability to appreciate in value. However, a wine with little history at auction doesn’t stand a great chance of future appreciation.
But even so wine investment is a little more complicated than investing in, say, stocks or bonds. Firstly, when you’re investing in fine wine, your time horizon must be at least five years. It can take that long before the value of your wine stock appreciates significantly in value.
Nonetheless investment wine is proving to be a lot more lucrative these days. While there’s certainly an element of risk involved, making the correct purchasing decision can yield high returns. Such as obtaining French Bordeaux is an absolute must-have when it comes to investment wine.
Don’t be surprised if wine prices are substantially higher because the focus is on high-grade investment wines. If the wines that you’re buying aren’t from Bordeaux or Burgundy, you should ensure that you restrict your purchases to flagship wines.
These are wine investments that are sourced from successful wineries that have established themselves as leaders in their respective geographical region. A flagship wine is usually the most awarded wine that a winery produces. If you follow this strategy, your wine investment returns are likely to be higher.
When you make a wine investment, you’d probably deal with a retailer or a wine auction house. Wine is usually sold in sets of 3, 6, 12, or 13 bottles. A standard case consists of a dozen 750ml bottles. That’s nine litres of fine wine.
Through the purchase of these bottles by the case it provides the individual making a wine investment the opportunity to try one bottle. Of course, if you’re very confident about the potential of the wine that you’re buying, you could decide to purchase several cases of a particular wine at a time. But that’s a high-risk approach and it’s more prudent to diversify your wine investment.
