Advice On Wine Investment

Wine investors ought to usually rely on expert assistance when venturing into investing in fine wines, since only 1% of wine made is of investment quality. One of the golden rules of wine investment is to acquire the greatest wines from the greatest vintages. Usually limited in quantities, they’re continually in powerful demand. Such wines should, under present market conditions, improve in price of between 50-100% before reaching full financial and physical maturity. The crme de la crme from any top vintage might 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 should be regarded in 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 powerful demand profile. Records going back about 250 years, show that fine wine has remained one of the steadiest forms of investment in the world, normally unaffected by stock market fluctuations and interest rate changes.

Wine Investment average returns

Fine wine investment has outperformed the FTSE 100 and also the Dow Jones, offering significant returns without the volatility from the stock market for the last 25 years. The wine investment marketplace has remained largely immune from the credit crunch, creating opportunities for great profits. Wine is an effortlessly transferable asset; there’s an established fine wine marketplace plus a thriving auction marketplace.

However, 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 average return from investing in fine wine from good 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 too risky and the returns are not worthwhile.

Acquiring wine ‘En Primeur’

Wine futures (also known as “En Primeur”) refers to buying wine after it is made, but before it is bottled. This involves buying the wine in the summer after the harvest but not actually receiving it for another 18 months. While there is no guarantee, historically, the prices almost always increase over this period. Wine investment is not usually a short-term investment which can be realized at any time.

Keep your wines in a professionally managed bonded warehouse. This can be done independently through your own account or through your merchant and will ensure that your wines are kept in good condition, which is vital for their resale value. It also means you will avoid paying VAT and Duty when you re-sell your wine. Rather than buy a large number of inexpensive cases, it makes more sense to buy a small number of high value wines. Serious wine collectors should consider insuring their wine. If you store your wines at wine storage facilities, such places will generally have insurance arrangements in place. For a small collection, not too expensive and primarily for consumption, insure your wines under your homeowners’ policy.

Stop by Profiters website for wine investment expert advice, buying wine futures En Primeur and selecting the best vintages to maximise your investment returns. Learn more about wine investment today.