Jul. 23, 2009
It is definitely possible to make money through investing in top wines; however, it is certainly not as easy as is often suggested. Well known financial market-rules and risks do apply to wines also, sometimes even more so.
You might have heard that the wine market is generally moving up? Not true at all! Wine is not as volatile as equities and does not reflect changed economic conditions as quickly as the stock market, but sooner or later it will follow the market trend. Therefore, as with other investments, caution and knowledge is everything, if you want to avoid expensive mistakes.
This new wealth guide gives you a first taste on which possible choices you face while making wine investments, how to identify valuable wines and avoid potential pitfalls.
Our general advice is to stay on safe ground:Invest in bottled, almost mature wine; keep your hands off wine subscriptions (en primeur) and wine funds. Don’t allocate more than 10% of your assets to wine investments.Also bear in mind:
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To be a great wine connoisseur does not mean automatically being a great wine investor. A wine collector buys wine he would like to drink himself. A wine investor should buy what other people will want to own.
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Avoid emotional decisions and decide systematically. Evaluate your risk appetite, use experience and knowledge to decide if wine is the right investment for you.
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Choose your wine trading company, distributors, vendors and warehouses accurately and conscientiously.
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A quantum of solace: If the market does crash, you can at least enjoy by liquidating your assets.