Wine Investment Advice

Wine investors should always rely on expert advice 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 buy the greatest wines from the greatest vintages. Usually limited in quantities, they are always in strong demand. Such wines should, under present market conditions, increase in price of between 50-100% before reaching full financial and physical maturity. The crme de la crme from any top vintage may 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 typical 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.

Obtaining 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 is usually done independently through your own account or via 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 acquire a large number of inexpensive cases, it makes much more sense to purchase a small amount of high worth wines. Serious wine collectors should think about insuring their wine. If you store your wines at wine storage facilities, such places will generally have insurance arrangements in place. For a little collection, not too expensive and primarily for consumption, insure your wines under your homeowners’ policy.

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.