Wine investment – what makes it a top shelf investment?
A wine bottle that is valued at $4,000 can reach $40,000 if the wine is exquisite. Some people have trouble believing that returns on wine investments can be that significant. In all honesty, everything’s possible in this domain. Top-tier earners that lost quite a lot of money back in 2008 are currently recovering, and if they haven’t given up investing in wine, why should you? Although the financial crisis is far from being over, there are aficionados who believe in the power of fine wine. People have turned their attention on this incredible liquid asset because they want to invest in something they can trust.
While some are looking at traditional investments such as diamonds, art and gold, others are seriously looking to invest in wine. In spite of the high-risk and volatility, connoisseurs are confident that the market is stabilizing. And they’re right.
Investing in wine – it’s all about knowing when you buy
The start of recession in 2008 was good for the wine business because a lot of Wall Street brokers were collectors. They lost their jobs and their only way out was to sell off their wines. It was an excellent period for investors to buy. Another great period was between 2010 and 2012 when the Chinese started to hunt after the world’s most valuable French wines. Prices skyrocketed for a split of a second, only to drop because they left the market in 2013.
Investing in wine is a long-term, gradual venture. Just like some other types of commodities (gold for example), it shouldn’t be more than 5% from the portfolio of an investor. Specialists agree that one must not buy wine as a leading part of their portfolio. Collectables like bonds and stocks generate insane amounts of cash only when they’re being sold.
A top-shelf investment
Investing in fine wine can be exciting, fun, and intriguing. Some people are in love with wine and they want to foster that fascination by making an investment. However, novices should get to know the market really well first. Buy wine for your own pleasure, don’t buy it as an investment because there are chances you’ll be disappointed. If it turns out that the value is good, then you can acquire more and start selling. Making sensible decisions and starting small is the key in the wine investment field. Having a solid wine portfolio could someday be extremely valuable, but to get there you have to be patient.
It’s not easy to get into the wine market, and as a potential investor you have to know that buying wine is just like buying some other kinds of high-end purchases. The market can be unpredictable at times; it’s vital that you seize the moment. Connoisseurs know a good deal when they see it.
Protecting your wine investment
If you want your investment to be priceless someday, you have to protect it. Top-quality wine must be stored properly. Some investors are willing to pay hundreds of thousands of dollars for climate-controlled, custom-designed wine rooms. But if you can’t afford to have your own cellar, you can always buy your place in someone else’s. There are many wine storage providers out there, so it’s best to do a market search first. Only go for reputable names if you want your product to last for up to 5 years in excellent conditions.
The number one enemy for wine is heat. Temperatures that are higher than 70° F can age a type of wine extremely fast. Even worse, your wine can be compromised if the temperature reaches 80° F and above. Apparently, 55° F is the perfect temperature, but that’s not an exact rule. There are other conditions that keep your wine aging properly such as light, humidity levels, and coolness.
There’s no exact way to predict how much time a type of wine needs to reach maturation and become a valuable investment. Scientists have tried for years to uncover the great mystery behind wine foretelling. Acidity and tannins are two of the most important factors thus far. In terms of wine investing, there’s no doubt that starting such a business is tricky. You have to believe in the wine first, like it for its taste and buy it with the initial purpose of drinking it. If it turns out that the value of your cases increases, then you can easily call it an investment.
