Wine Investing Tips
Simple in theory – purchase sought wine and resell it later at a profit – yet a bit more complicated in practice, wine investing is not for everyone. Investments in wine can be highly profitable, return investments having increased by 269% from 2005 to 2010, yet only if done right. And do to things right you need to be a lover of wines yourself, to know the market, to have connections, in short, to know what you are doing. Here are some tips for starters.
Invest the Right Amount and Be Patient
To earn significantly from your investments in wine you’ll have to invest thousands of pounds. Yet you can get nice returns on your investments even when you put in less money. You have to be realistic though. A thousand-pound investment, well placed in demanded bottles, may bring you twice or thrice as much, but only in a few years. The returns on wine investments are significant, but they usually come slower than with other types of investments.
Don’t Bother If You Don’t Like Wine
A good wine investor is savvy about wines, necessarily a connoisseur. Not being passionate about the drink yourself means that you won’t probably take the trouble to keep up with the latest developments in the industry, the harvest predictions, the most sought bottles and so on. What’s more, if you love wines you always have something to fall back on if the investment doesn’t work: drink the wine yourself.
Investing On Your Own Is Hard
Starting a new investment is always difficult, and especially when it comes to wine. As already said, knowing about fine wines is imperative to making money out of wine investments, and being all by yourself in the beginning, when it’s the hardest, is challenging. Your partner or partners don’t have to be necessarily wine experts – they just need to have the pocket and willingness to invest. Remember though that there is always an alternative when you’re on your own: wine investment funds.
Be Ready to Pay For More Than Bottles
One of the most costly things about wine investing is storage. Fine wine must be kept in ideal storing conditions if it is to mature, realizing its full potential. What’s more, there are transport costs to consider, especially if you don’t live in mainland Europe. The best wines for investments are usually produced in France, and if you want to sell them elsewhere, which is likely, you’ll need to support additional transport costs.
Finally, when first starting your wine investing, consider well your investment options, and whether investment funds or trusts are not safer until you become familiar with the market and its players.
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