19 Aug Wine 101 – August 19, 2015: Wine Collecting: What Should I Look For?
This Week In Wine 101: What To Look For When Collecting Wine
As with most investments you want to weigh what the pros and cons may be before committing to such a pursuit. Like any investment there are risk characteristics and return characteristics. Most newcomers who consider wine collecting or investing in fine wines see it as an opportunity to make money, however the act of investing isn’t as black and white as it may appear. The pursuit itself is one that requires an understanding of the wines themselves, patience, funds, a trusted merchant, and an investment consultant that can help guide you through the territory and offer tips or advice that will help build your wine investment portfolio.
So which regions produce investment worthy wines? Well, there are a select number of top regions renowned for producing some of the best wines in the world – these wines not only improve with age but also appreciate in value. These regions are worth committing to memory:
Bordeaux, France *
Burgundy, France *
Douro (Port), Portugal
Rhône Valley, France
So, why are the above regions as well as certain vineyards so acclaimed for their wines? Many believe it is a combination of factors such as, the limited number of bottles they produce each year. When the supply for these wines is low the demand grows and values rise. The most notable vineyards produce the best quality grapes, possess ideal growing conditions, and are considered to have some of the best soil, contributing to the wines features.
We’ve compiled a list of some of the more notable wines to consider as part of your wine investment portfolio: Before making an invest (of any kind) make sure to first consult with a (wine) expert in the field you’re looking to participate in. In this case a wine merchant or wine investment consultant will help you select the best wines or vintages more likely to hold or appreciate in value over time:
Best Wines & Vineyards to Invest In:
Château Latour – Médoc/Bordeaux
Château L’Évangile – Bordeaux
Château Lafite Rothschild – Bordeaux
Château Ausone – Bordeaux
Château d’Yquem – Bordeaux
Château Haut Brion – Pessac
Château Montrose – Bordeaux
Château Cheval Blanc – Bordeaux
Domaine Dujac Clos St.-Denis – Burgundy
Domaine Leroy Clos de Vougeot – Burgundy
Domaine de la Romanée-Conti Richebourg – Burgundy
Château Trotanoy – Bordeaux
Armand Rousseau Chambertin – Burgundy
Château Lynch Bages – Bordeaux
Château Margaux – Bordeaux
Opus One – Napa
Harlan Estate – Napa
Sassicaia – Tuscany
Ornellaia – Tuscany
What are some benefits to pursuing wine investing?
- Business is a booming! That’s right, if you’re interested in collecting or investing in fine wines, a growing economy is as perfect a time as any and is showing consistent returns for those looking to invest and collect in the fine wine market.
- Truly fine wine is produced in small numbers, which results in a higher likelihood for profitable gains. The global demand for and declining supply of a particular wine is what creates that dynamic combo for wine aficionados to invest in.
- If you find that the wine(s) you invested in do not show any sign of profitability, you can always drink the wine.
- Unlike other investments, wine shows strong signs of producing excellent returns on investment provided you have the right merchant and investment consultant to offer helpful advice and guidance.
- The risk of losing money when you invest in fine wines is considered much lower than say the stock market. Not to mention, it is able to withstand stock market fluctuations, recessions, and even interest rate movements.
- The pursuit of investing in fine wines is 100% tax free as well as your profits from such a sale. What’s more, if you keep your investment wines ‘in bond’ you won’t have to pay duty or VAT (Value Added Tax).
- Investing in fine wines brings diversity to your investment portfolio.
What are some downsides to consider when pursuing wine investing:
- Like the stock market, the prices for fine wines can fluctuate, so there’s always the possibility of loss. To ensure you make the moves that will most benefit your investment portfolio and bring profitable gains, speak with a trusted (wine) investment merchant, advisor or consultant.
- Some wine merchants may have opinions regarding which investment wines will appreciate or plateau in value. However, make sure to buy wines from established merchants or brokers to ensure you make the right moves to avoid losses.
- When it comes to investing in wines, you should expect a minimum of five to ten years before you see profitable returns.
- As with any industry, there are fraudsters who will try to take advantage or con those who are less experienced in the realm of wine. Make sure you speak with wine merchants and brokers with a reputable name, who come highly recommended by several sources.
- Sometimes fine wine runs the risk of being damaged or spoiled. So, insurance is necessary to eliminate the possibility of losing money.
- Look into the currency risks if you are an investor from the United States.
To conclude, make sure you thoroughly examine the risk and return characteristics of the wines you’re looking to invest in. Also, find a trusted wine merchant to help you find fine wines that will appreciate and result in high returns. You now know the Bordeaux region is famous for producing the best with great longevity and the ability to provide high returns. We hope you found this article helpful.
Note: Regions with an asterisk (*) indicate that the region’s wines are highly sought after and have a history of producing wines that increase in value over time. Also, wine connoisseurs recommend investing in Château Grand Cru Classé along with other top wines from Bordeaux and carefully select wines from other regions – for example, Burgundy, Champagne, etc.