| Interested in becoming a wine collector? There are | | | | currently, as they hold an opportunity for capital |
| two primary reasons why individuals collect wine; as | | | | appreciation. |
| an investment to personally enjoy at a later date, or | | | | In addition to prices, futures and scores, investors |
| as a financial investment with the intention of | | | | should also take note of fill levels, insurance, wine |
| generating a profit from a future sale. | | | | storage and valuation when making investment |
| During uncertain economic times, individual investors | | | | selections for their collection. |
| often turn to alternative investments, rather than | | | | Which Wines Hold Their Value when Stored? |
| traditional securities for their private capital. | | | | While a variety of wines can be considered |
| Commodities such as gold, platinum and even wine | | | | investment grade, yielding investors profits over time, |
| top the individual investor lists within the U.S. and | | | | there are a few well known types that are often |
| around the globe when the more well known | | | | added to portfolios for their long term, proven capital |
| investment markets begin to exhibit signs of | | | | appreciation track records. |
| fluctuation. Before you turn to wine as an | | | | Bordeaux Wines |
| investment, it is crucial to understand the financial | | | | Many wine portfolios include classic red Bordeaux |
| opportunity, initial investment costs, what to select | | | | from top vintages as these wines have a well |
| and how to care for the investment over time in | | | | established secondary market, making them a solid |
| order to realize the potential appreciation. | | | | long term investment. These wines are also known |
| Building a Wine Collection- Understanding the | | | | for their positive reaction to wine storage over time. |
| Investment | | | | The top vineyards produce a limited quantity of |
| Investors can begin to build an impressive collection | | | | cases per year, typically less than 500,000. This limit |
| on a relatively modest capital investment. Wine | | | | in quantity is one of the factors determining the |
| investors begin their collection by purchasing by the | | | | value of these wines, as it pushes their values higher |
| case, ranging in price from $2,000 to $10,000+, | | | | than other vintages. |
| depending upon the vintage and producer. Each wine | | | | Burgundy Wines |
| will have an associated prime maturity date, or time | | | | For investors who are interested in both red and |
| frame in which the investment value is expected to | | | | white wines, Burgundy wines may be appealing. |
| peak. | | | | These wines are also produced in restricted volumes, |
| Most investment grade wines will develop their value | | | | so are often purchased immediately following their |
| several years following their addition to your | | | | release. There are only a few Burgundy wines that |
| collection, but of course this depends upon when you | | | | have established a strong secondary market |
| purchased it and if it had an inherent value at the | | | | presence, including Domaine de la Romanee-Conti. |
| time of purchase. Therefore, investors should have | | | | Other Regions |
| an investment time frame of 5-10 years, as the | | | | Over the past decade, interest has increased in wine |
| appreciation will unlikely be available within the shorter | | | | collection, so additional vintages have begun to |
| term. Appreciation ranges from 20-120% depending | | | | develop a secondary market presence. Italy, Spain, |
| upon the vintage, purchase price and final sales price | | | | Rhone Valley and California regions are now each |
| of each individual bottle. Shorter and longer term | | | | producing wines with a strong secondary market |
| investments should be utilized within the investor's | | | | presence, giving investors more to select from than |
| portfolio to provide for proper investment | | | | the Bordeaux or Burgundy wines. These secondary |
| diversification. | | | | markets are newer, so the trading volume is |
| Building a Collection- Basics of Evaluating Wines | | | | significantly slower than the more traditional |
| As you begin to search for wines, there are several | | | | investment grade wines. |
| terms and factors in which you should become | | | | Vintage Port |
| familiar with, including: | | | | For port lovers, there are investment grade options |
| · Wine Scores- Most wine enthusiasts are familiar | | | | including Croft, Taylor, Fonseca and Graham. One of |
| with scores commonly assigned to individual wines. | | | | the attractions to port as a long term investment is |
| These scores not only help an individual to select a | | | | that it ages well in wine storage, giving them a strong |
| wine to enjoy, but enable investors and traders to | | | | longevity. |
| establish their position. Wine scores are also | | | | Keeping your Investment at its Top Quality |
| universally understood worldwide, opening up the | | | | When purchasing great wines as an investment, it is |
| wine market to global investors. | | | | crucial to understand how to store them, as if they |
| · Wine Futures- Also referred to as En Primeur, | | | | are stored improperly, their value will never reach its |
| wine futures refer to purchasing wine after it is | | | | true potential. Ideal wine storage conditions include |
| made, but before it has been bottled and is a wine | | | | wine rack, wine chillers, and an environment that is |
| investment niche. Samples of these wines are | | | | neither too dry, nor too damp. Most wine experts |
| created for collectors, distributors and journalists to | | | | recommend the temperature of wine cellar storage |
| taste, allowing bottles to be sold, but not shipped | | | | to be near 55 degrees Fahrenheit. Wine should also |
| until 1-2 years later. Many investors are attracted to | | | | be free of light and vibration. While collectors could |
| this opportunity, as there is a greater chance of | | | | establish proper storage within their homes, most |
| purchasing a wine at a discounted value that will | | | | turn to professionals for their valuable collections. |
| appreciate faster or greater than more well-known | | | | So, if you are in search of alternative investment |
| wines already sold on the open market. | | | | options during this uncertain economy, consider wine |
| · Wine Prices- Statistics showing price fluctuations of | | | | collecting. Worst case scenario, you are building an |
| wines can be a valuable tool for selecting investment | | | | amazing collection of wine that you can enjoy |
| grade wines. Just as you would utilize a stock price | | | | potentially for decades. |
| chart, look for wines that are considered undervalued | | | | |