Wine investments are a global phenomenon. Perceptive investors are looking for safety, and they realized that commodities and stocks are not living up to their expectations anymore. Fine wine is coupled with high profits, and investors are finally convinced that the market can be extremely profitable and lucrative. Some of the world’s most expensive and renowned wines such as Chateau Lafite Rothschild began to draw people’s attention as an “en-primeur” (which means that the wine started to gain success prior to being bottled) 2008 vintage. The price boosted with a percentage of 150% throughout the year of 2009, which denotes that the wine is the only type of investment that can increase so abruptly without posing any serious dangers.
Not all wine types can increase like the Chateau Lafite did in 2009, and it’s important for investors to know that only the world’s most distinct selection of fine wines can have such amazing returns. In the wine business, the financial investment is a sensible one, which means that shareholders can’t lose their money. Fine wine can always be sold at some point. One might not succeed to get a satisfactory price for his collection now, but in a couple of years he might get more than he ever expected.
Fine wine is a tangible luxury asset
As tangible assets on the global wine market, luxury wines are extremely valuable in the liquid sector. The greatest returns can only be attained by selling the right type of wine at the ideal time and for the right price. It’s crucial for an investor to know the literal time his wine is ready for sale in order to optimize profits. One of the world’s most prestigious and expensive wines – the Bordeaux Chateaux – is only able to produce limited wine quantities each year. France has limited the production of Bordeaux Chateaux, which means that the supply is extremely reduced. The rarity of the wine and the low supply makes it extremely valuable, and that’s the main reason fine wine is so valued by the world’s richest individuals.
Blue-chip wines come in limited bottles. At some point, someone will open a bottle to enjoy its content, and when that will happen, the value of the remaining bottles from the collection will automatically increase. The available number of bottles will drop, the wine will become a vintage, and thus its price can only go up.
The world’s finest wine hubs
Hong Kong and China have managed to attain a front seat in the wine market over the past decade. They’re a major force with an emerging economy, just like the Indian market. Although they haven’t surpassed New York and London, their impact on the global wine market is extremely sturdy. Together with the abolishment of trade taxes, Hong Kong is on the rise as far as the fine wine popularity is concerned.
France is still a runner-up, however, its wine production is constantly dropping. Since 2007, France, reduced the production by 11%. Italy, Spain, Argentina, Australia, Germany and South Africa are all great wine producers as well; as you can see, wine is everywhere, and it’s the type of investment that can bring amazing returns. Nevertheless, it’s of the utmost important to know the ins and outs of the market in order to be convinced that fine wine is a moneymaker. Investing in ‘liquid wines’ is essential if you want to make it in the business; wines with proven track records, increased volume of supply and sufficient liquidity are the most recommended. Wines with reduced financial liquidity can pose a great risk; in this category we have en-primeur wines, vintages that are not placed in standard bottles, and wines older than 25 years old.
Not everyone sees fine wine as a sensible investment, and that’s because most people are not properly informed or never had the time to find out more about how valuable wine investments can be. Believe it or not, getting starting in this business is similar to getting involved in any other type of affair. All you have to do is settle on a budget and get started. What types of wines appeal to you? Do you have any experience? Are you ready to wait 5 years to reap the benefits of your investment? Make sure to answer these questions prior to getting started.
Author Bio: The article is being authored by a regular blogger Peter Smith. He has a good knowledge about investment and where to invest. Also, he suggests site http://www.wineinvestment.com/ for fine wine investment advice.
