| Wine Investment Advice |
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| Written by Dezmand Chin |
| Thursday, 11 February 2010 12:40 |
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Wine investors ought to often rely on expert assistance when venturing into investing in fine wines, since only 1% of wine produced is of investment quality. One of the golden rules of wine investment is to acquire the greatest wines from the greatest vintages. Typically limited in quantities, they are usually in powerful demand. Such wines should, under present market conditions, improve in price of between 50-100% prior to reaching full financial and physical maturity. The crme de la crme from any best vintage could increase even more.
Wine investors ought to often rely on expert assistance when venturing into investing in fine wines, since only 1% of wine produced is of investment quality. One of the golden rules of wine investment is to acquire the greatest wines from the greatest vintages. Typically limited in quantities, they are usually in powerful demand. Such wines should, under present market conditions, improve in price of between 50-100% prior to reaching full financial and physical maturity. The crme de la crme from any best vintage could increase even more. Bordeaux makes up over 90% of the wine investment market, with first growth clarets like Lafite, Latour, Margaux and Haut Brion considered top-of-the-range, followed by Cheval Blanc, Petrus, Le Pin and Ausone. To get the best returns, most wine investments ought to be regarded from the medium to long-term, with a minimum of five years. The best wine investment returns are to be had over a 10- to 15-year period. For a top quality investment the wine must have a combination of brand repute, positive critical comment and a strong demand profile. Records going back above 250 years, show that fine wine has remained one of the steadiest forms of investment in the world, commonly unaffected by stock market fluctuations and interest rate changes. Wine investment average returns Fine wine investment has outperformed the FTSE 100 along with the Dow Jones, offering significant returns without the volatility in the stock market for the last 25 years. The wine investment marketplace has remained largely immune from the credit crunch, creating opportunities for excellent profits. Wine is an effortlessly transferable asset; there is an established fine wine marketplace and a thriving auction market. On the other hand, it would be nave to think that every wine investment is likely to generate anywhere near that level of return. Issues such as management fees for wine investment funds should be taken into consideration, as should the storage costs if wine is purchased privately. The common return from investing in fine wine from great vintages is about 15%. To make the most from your wine investment portfolio, we recommend a minimum of 2 to 10 years. Short term investing, of 2 to 3 years can bring healthy profits but anything less than 2 years is very risky and the returns aren't worthwhile. Buying wine 'En Primeur' Wine futures (also known as "En Primeur") refers to obtaining wine after it is created, but before it is bottled. This involves obtaining the wine in the summer following the harvest but not actually receiving it for another 18 months. While there's no guarantee, historically, the prices almost constantly increase over this period. Wine investment is not generally a short-term investment which could be realized at any time. Keep your wines in a professionally managed bonded warehouse. This might be done independently by way of your own account or by your merchant and will ensure that your wines are kept in very good condition, which is vital for their resale worth. It also means you'll avoid paying VAT and Duty when you re-sell your wine. Rather than obtain a large amount of inexpensive cases, it makes extra sense to acquire a little quantity of high worth wines. Serious wine collectors have to think about insuring their wine. If you store your wines at wine storage facilities, such places will commonly have insurance arrangements in place. For a small collection, not too costly and primarily for consumption, insure your wines under your homeowners' policy. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. For more information on wine investment expert advice, buying wine futures En Primeur and selecting the best vintages, visit Profiters to maximise your wine investment returns. |