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A Simple Guide To Wine Investing

A Simple Guide To Wine Investing

If you’re a lover of Niagara's wine, why not turn your passion into an investment? Investing in wine is a lucrative venture. On average, wine boasts an inflation-adjusted price appreciation of 3.7% annually, U.S. News reports. While investing in wine may seem complex, it’s actually pretty simple. You purchase and store bottles or cases of wine and sell them for profit once the price has appreciated significantly several years later. With adequate research and capital, wine investing is something anyone can do.

How much can you afford to invest?

Wine is an accessible and popular investment for people of all different ages and incomes — from graduates to retirees. You need to be prepared financially to invest at least $10,000, which can buy you either a full case or single bottle depending on variety and age. Bear in mind investing in wine comes with a fair share of risk. Market demand is unpredictable. Poor harvests may cause price hikes. Mishandling or inadequate storage can lead to spoilage. However, you can also purchase wine insurance to cover damage. Moreover, since the value of wine increases over time, you need to be prepared to play the long game. Expect to hold onto wine for at least seven to fifteen years before you see return on your investment.

Research value

Read critic reviews to learn about the most valuable wines — a score of 95-100 indicates high quality. Vintage wines tend to be preferred by collectors and scarcity also plays a role in increasing value. Wines in limited production now are likely to be scarce in the future. Additionally, opting for highly-sought wines from locations like Niagara, Burgundy, and Napa Valley are more likely to retain their value in times of financial uncertainty. It’s realistic to expect a return of 8% or less, however sometimes people get lucky. Avid wine collector, Miguel Farra, recently purchased cases of 1982 Chateau Lafite Rothschild for $40 a bottle ($480 per case) and sold them for $4,000 a bottle ($48,000 per case).

Storing wine correctly

Store your wine correctly to prevent spoilage and protect your investment. Overly cold temperatures may cause the wine to form small crystals, while excess heat quickens the maturation process, so you’ll have to sell the bottle sooner and lose out on profits. Wine should be stored in the dark at a suitable temperature between 45-65 F. You may need to either purchase a wine cooler or use professional wine storage facilities. If so, factor these fees into your budget. The money you pay for reliable storage will be worth it once you reap the returns on your investment.

Wine is a lucrative investment, however it’s important to do your research and understand both the opportunities and risks. Consulting a professional wine buyer for advice can help you get the most out of your investment. Give it some time and your passion for wine can become financially rewarding.

 

Contribution by Jenny Holt

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