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*I’m probably the furthest thing from a financial advisor. DO NOT take this Investing in Wine 101 article as investing advice. It is purely an interest piece on wine as an investment. Do not invest your money without first consulting with a licensed financial advisor.
The world is ripe for investing, while some may think it’s a vintage way of amassing wealth, we think of it as more of a barrel of opportunity. Welcome to investing in wine 101, sorry for the bad puns. A lot of people have a lot of ideas about where to put your hard earned dough. Take it from your uncle Joe, or on the other hand perhaps stick to what you know. That’s wine of course, investing is a lot like finding a career. Invest in what you love, because what you love is probably what you know. If you’d like to get an idea of what investing in wine is all about, you’ve come to the right place.
Investing in Wine 101
Wine has been characterized as a traditionally stable investment. When you’re investing in wine you’re betting on the value of a tangible thing, a bottle. Many wines increase in value, especially those of a certain vintage. If properly handled, many people believe wine is a good place to keep your money. You should always diversify, never rely on one stream of anything, really. Think of wine as a long term opportunity centered around one of your favorite hobbies.
How Does it Work?
You’re buying, (whether indirectly, as a group, or personally), wine for the purpose of storing and selling at a higher value, at a later date. Mutual funds as well as other buy-in options are available as always, but whatever you and your licensed financial advisor decide works for you is what you’re in for. Vintages, age, region and producer all influence the value of wine over time. These are all important factors to consider in selecting the wine portfolio that works best for you.
When it comes time to sell, you’re going to consider these factors carefully. Trends affect wine stocks just like any other, collectors and consumers tastes change frequently. Taking these trends, especially those present in the media or wine circles, is a good way to kick off your research on the matter. With a tall glass of your favorite wine, of course.
A Solid Investment?
Nothing is. Don’t put all your eggs in one basket, all of your chips on black, or all your money on the ponies. Like any investment wine stocks are subject to a laundry list of uncontrollable market influences. Don’t forget that it’s a physical asset that, like property, can literally go up in smoke. Does this mean wine futures don’t have a better chance of steady and reliable increase and return? Not at all. It is generally considered to be a more conservative and reliable stock option. The reason for this is there’s measurable, historical and countless examples of certain vintages gaining value over time, especially when availability is taken into account.
One of the reasons many consider wine to be an investment less likely to rot would be due to the nature of its classification. The thing is, wine has very little to do with other assets in the market. In short, it’s less likely to sour due to any one particular set of assets in disarray. If you can learn to take advantage of risk factors for the better, you might find some success in this gamble yet! Take a risk assessment of your own, consult with the professionals and keep abreast of current market trends and of course, protect your physical asset if you can.
How to Get Started Investing in Wine 101
First things first, take stock of your financial resources and make informed, conservative decisions when it comes to your very hard earned money. Secondly, equip yourself with the numerous information sources at the tip of your fingers. Liv-ex, or, the London International Vintners Exchange, is where wines are traded and their values measured against market trends. The smartest way to stay on top of your liquid asset is to stick to the marketplace with the most staying power, and investors.
This service will facilitate the traditional marketplace functions you’ve come to expect, including the delivery and handling of your physical asset upon acquisition. Not to mention, a service like this can be trusted to back up your investment decisions by ensuring every deal is handled above-board. Data for sourcing potential opportunities, the largest pool of dealers, as well as the tools to make trades are all of the benefits of utilizing this marketplace.
Next you’ll want to make decisions with a trusted financial advisor. Make sure there’s room in your budget, and make sure your lifestyle is suitable for investing. These types of portfolios aren’t exactly demanding of a day trader, but they will require attention and research. You’ll want to get the best bang for your buck, always. Find vintages that are right for you, and you’ll enjoy investing in an industry you’re already involved in.
Storing Your Wine
Don’t tread lightly and make assumptions when it comes to storing your wine. Do your research. Different wines favor different conditions, and a temperature controlled area is only the tip of the iceberg. Investing outside of the context of a mutual fund or otherwise, where wine is held off site and out of the direct hands of the numerous investors, you’ll find yourself with your own grape juice. Shipped to your doorstep, you investment is prone to freezing, being smashed, rotting, spoiling, and of course, accidentally drinken.
If there’s one take away from this article, go with the professionals. There are services you can have your bottles shipped to be stored, and protected according to their needs. They’ll live in climate and humidity controlled environments for a fee worthy of protecting your very fragile investment. Remember: wine is like any other physical asset. Art, property, cars, even gold & silver can be lost, stolen and depreciated in a number of different ways. Take the necessary precautions and invest according to your financial and physical ability to accommodate a wine portfolio.
Other Guides to Check Out
If you like learning everything you can about wine, we have several guides you can check out. Get in the know with these posts:
- Your Guide to Drinking During a Pandemic
- Instagram Wine Photo tips
- Etiquette of Bring Your Own Wine and BYOB Corkage at Restaurants
- 10 Podcasts about Wine to Check Out
Thanks for checking out our primer on wine investing! Tell us if you’ve got any experience investing in grapes, and whether or not you’d recommend it. What vintages would you put your chips on? Until next time, best of luck and happy sipping!
