Fine wine investments are a fun and profitable way of diversifying your portfolio. If you’re a wine aficionado, collection good wine can bring you both joy and profit. However, just like any other form of investment, there are certain risks you must be aware of as nobody can guarantee that you’ll see significant returns. Focus your attention on wines from top areas such as Burdungy and Bordeaux in France; also, red wine is better than white wine from an investment point of view, although nowadays experts agree that investing in either type is a wise decision. Here are some tips to help you invest in wine while having fun and making good profit.
Choose a trustworthy merchant
You can’t buy fine wine from just anyone claiming to offer the best vintages. Scammers and unscrupulous dealers are everywhere. Nowadays, “thanks” to advanced technology, it’s simpler than ever to fake fine wine bottles. Here are some tips to help you choose a reputable merchant:
- Stay away from cold calls – be wary of people calling you out of the blue, or sending you emails wit unsolicited offers. They can’t be trusted and their intention is probably to rip you off
- Perform a background check – merchants with years of experience in the wine business are the best. Look at their track record and check to see if their other clients were satisfied with the services provided. A good wine merchant has nothing to hide.
- Wine merchants should own a physical business – it’s important for a merchant to have a physical address too, and not just a PO Box. Prior to sending any money, make sure the information you have is legit. Check the office and meet with the merchant in person.
A wine merchant, a friend or a colleague can advise you to buy a certain type of wine, but that’s doesn’t mean you must listen to them. It’s always a good idea to research on your own. There’s a wealth of reputable sources to check out; start with official wine blogs and websites like Liv-ex for example, and read forums to stay updated with prospective market changes. If you want to buy investment grade wines, which are pretty expensive, make sure to verify their provenance. Official documents to attest the origin of the wine are mandatory.
Packaging and condition
When buying fine wine, pay close attention to the smallest details. The smartest way of investing is to purchase wines that are in unmixed, sealed cases. If by any chance, the wine was repackaged or the cases have been damaged, this means the product’s value decreases. Perform a comparison on the wines you’re thinking to purchase and don’t hesitate to bargain. Get an estimate by checking the web or you can always ask for assistance from wine experts.
Fine wine investment is a worthwhile investment provided that you have what it takes to make sound choices. As soon as you made the decision to invest, the next step is to take precaution measures and secure your wine. For instance, if you want to avoid VAT, make sure that your product is being stored in a bonded warehouse. Perform period checks to certify that your investment is preserved in the best conditions.
Get your priorities straight
Much like investing in real estate, stocks or anything else, it’s impossible to know for sure that your investment will pay off. The first step to succeeding in this business is to get informed. Know as much as possible about the wine market, do your research and take all the time you need to sample various types of wines. Learn about vintages and seek the services of a reputable merchant to help you get through the process.
Before spending money on wine cases, ask yourself this: do I want to invest in wine because I like the product or because I want to make money? Many investors who have succeeding in the wine business are not avid drinkers. Of course, it’s always a good idea to invest in things you actually enjoy; because you’ll be waiting 5 to 10 years to see returns, at least your investment will be well worth the wait.