Wine has been used as a way to invest and as a store of value for many years. Investing in wine is now easier than ever with wine stock exchanges, specialized retailers and storage solutions, and investments funds that deal with wine specifically. But you first have to know what you’re doing so that you get the most out of your investment. Underground Cellar had a few words to say on why wines could be a good investment, and how to make the most out of your collection. Here are some useful insights.
What Makes Wine Such a Great Investment?
One of the best things about wines as an investment is that their prices usually don’t follow other investment products. So, when the sky is falling, wines can be a solid refuge. Prices of great vintages have been steadily climbing over the years and it’s a very low-risk investment if you invest in the right ones. As a matter of fact, the fine wine market has been able to outperform most ETFs and global equities funds while providing 13.6% annualized returns over the last 15 years.
Understanding Investment-Grade Wines
You should know that not all bottles will give you a return, so you’ll have to know what makes a bottle worthy of investing in in the first place. In the business, an investment-grade bottle is one that is likely to increase in value after five years. Some of the things that should tell you if a bottle is an investment-grade are the quality of the vintage and the score critics gave it.
The pedigree of the wine along with supply during the year it was produced will be very important as well. If you have a wine that was scarcely produced from a famous region like Bordeaux, the Rhone Valley, or any well-known viticultural area, and it received great reviews from critics, you can be pretty sure that you’re sitting on a winner.
How to Buy Investment Bottles on Your Own
Buying bottles on your own will require that you do your research about wines and set a budget. You then need to find a reliable source, whether it’s auctions, a broker, or a specialized service. You will also need to think about things like storage and through which avenues you intend to cash them out when they reach their prime.
As you can see, wine can be a great investment, but you will need to do your homework first. Learn as much as you can before buying your first bottles and only buy from the most reputable of suppliers.