Investing in Wine
Investing in Wine
Investing in wine is a popular way to diversify your investment portfolio. Compared to investing in stocks and real estate, wine investing isn’t just about business. You can invest in wine as both a hobby and way to make money in the future. By combining the two areas, you can find a common ground between investing money and having fun.
Investing in wine is similar to investing in classic cars, coins, stamps, comics or even baseball cards. Compared to investing in stocks, wine investments are tangible and you can literally hold a bottle of vino in your hands. Wines appreciate over time, at least good vintages that cost a good sum when you invest do. When investing in wine, you are simply buying bottles to squirrel away for the future. After some time, these bottles will be sold for a higher price than what you paid for them.
Wine investing is not as sophisticated as it sounds. You probably have images in your head of millionaires going to fancy wine tastings, spending hundreds of thousands of pounds on bottles. But that is just a misconception. Investors do not have to have much money to make profitable investments in wine. All you need is the correct knowledge to get into the wine investment sector. If you want to invest in something different than your average stocks and mutual funds, then give wine a chance. It may be the best decision you make.
Know your wines before investing
Like any investment, you must know about the product you are purchasing. You should have a certain level of knowledge about wine to begin with. If you are serious about wine investing, you can pick up this knowledge as you go. But ensure you have a baseline of understanding before buying that first bottle.
You will need to know certain aspects unique to wine investing such as the influence of a vintage and its appeal to a collector. Rare vintages of wine are also preferred to the more common vintages. The rarer the wine, the more sought out they are due to the lack of bottles in circulation.
Another key aspect to understand is wine regions. Each wine producing region in the world offers up a different tasting wine. The regions also have reputations within the industry. Reputations can certainly alter the price point of an investment. In addition, a region’s wine can suddenly become popular. You might find that a bottle of Bordeaux wine is suddenly in demand and the price skyrockets.
When investing in wine, you need to diversify your holdings, just like with stocks. A wine portfolio should feature a variety of wine vintages. You should also purchase wines from different regions of the world. Stocking up on wines from a single region or vintage can be a recipe for disaster in the future.
Some investors may choose to purchase a single bottle of wine to put in their collection. However, if you have the ability to purchase a full case in original packaging, it could bring more profits to you in the future. This isn’t always the case as rare wines may only have a few bottles in circulation.
How much should you spend investing in wine?
The typical rule for investing in wine is that you should have $10,000 available to invest. Due to the price of certain bottles or cases of wine, you may not get a lot for that initial $10,000. In fact, you may only be able to buy a single bottle of wine.
Like any investment, you first need to decide how much money you want to invest. Wine investments have the same risk factors as other investments. However, you should also note that wine bottles can be broken, which means your investment could be dropped on the floor. A broken bottle would mean your big investment is now worthless. The good news is that you can purchase wine insurance.
Poor grape growing seasons and natural disasters can drive up the price for certain types of wine. This can be a good thing for you. Wines from specific regions that are affected by natural disasters and weather can skyrocket in price if you have them in your portfolio.
Some investors choose to work with a wine investment specialist. A specialist gives you the chance to work with an expert who knows the inner workings of the wine industry. The specialist will help you grow your portfolio by selecting the right wines that fit into your budget.
Wine storage is critical to keeping your investments safe. Poor storage will alter the flavor of the wine and your investment can be ruined. Some wine investors pay a third-party wine storage facility to keep their investments safe. Of course, you can build a climate-controlled section of your house to store wine.
Selling your wine investment
Once you have invested in wine and cellared it for years, you may be ready to sell the bottles and cash-in on your investment. Where will you sell your wine? One of the popular places to sell your wine investment is at an auction. You can sell wine either in-person or online through auctions. You will need to play commission charges when selling through an auction. Online auction houses will charge less in commission than a brick-and-mortar auction company.
A wine stock exchange is another popular way to sell a bottle or case of wine. Exchanges such as Cavex or Liv-Ex offer person-to-person wine bottle selling. You will need to pay a small commission to use an exchange. Finally, you may be able to sell direct to another wine collector. Investors buy bottles from other investors to increase their own private collections. You can buy wines and invest in bottles from the same sources.
Wine investing is a great way to invest your money that gets away from the traditional methods of buying stocks. Just like stocks, you need to know your wines before purchasing as not all wines will grow in price. If you invest your money wisely, you could reap great rewards when selling your wine investments.
Alexander Bentley leads Remedy Investments™ a private equity fund specializing in operational real estate. Remedy Investments™ has significant expertise in developing Luxury ApartHotels across Europe and the wider APAC region.
Alexander Bentley is the creator & pioneer behind Remedy Wellbeing Hotels & Retreats. Under his leadership as CEO, Remedy Wellbeing Hotels™ received the accolade of Overall Winner: International Wellness Hotel of the Year 2022 by International Rehabs.
Because of his incredible work, the individual luxury hotel retreats are the world’s first $1 million-plus exclusive wellness centers providing an escape for individuals and families requiring absolute discretion such as Celebrities, Sportspeople, Executives, Royalty, Entrepreneurs and those subject to intense media scrutiny.