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Adega de Borba,Wine,Wine Investments,Wine Sales

What’s a sensible wine investment?

Recently, someone commented negatively about something I had written about wine being an investment. “Why,” according tot his person, “would ANYONE want to invest in wine?” Well, one of those obvious reasons is that liquid investments DO pay off; most especially if it’s a rare wine, like a 1945 Margaux. this could take care of some college tuition, for instance.

  • Mature Wine Finder – Belgium: Brussels [Bruxelles]. Price excludes sales tax  – $ 17,436.09 Case of 12 Btls
  • FinestWine – 1945 Chateau Margaux, Margaux, France  –  $ 9,611.16 Magnum

I don’t have the space for a wine cellar, nor is my house the right, consistent temperature… Like I could even live in 55 degrees all of the time, 365 days a year; nor could I live in cave conditions, blocking out all daylight. So, I was never going to be collecting wine; however, being in this business, I’ve still got my share of bottles… regardless of their condition.

[I took both images for this story at Adega de Borba in Borba, Portugal, in their wine cellar.]

Yes, I could do like some people and get my wine into storage. Still, I’m not big on visiting a locker on a regular basis, so – as you can see – I’ve talked myself out of that kind of investing, at least for now.

Should I decide to change that, I’ve got a place to begin. That all started when I was contacted by Daniel Lofthouse of WineInvestment.com. As we talked, what he had to say made sense, so he sent some articles for me to read on wine investing. I’m now going to share some of the things I found valuable, as I read about the reasons to be investing in wine, versus anything else like stocks, bonds, property, etc.

  • By buying more wine than Jose and I intended to drink, the future sale of our excess cases ~ once matured ~ could fund new purchases (of wine or anything else we would want).
  • The wine market has proven to be low risk, with little volatility, versus all other types of investments.
    • The interest of the Chinese has had a lot to do with this one.
    • “With Chinese buyers showing insatiable demand for the top wines, and with only a finite supply, the demand | supply imbalance that this market relies upon has been exacerbated, and this is reflected in the Liv-ex Claret Chip Index’s 42% and 47% increases in 2009 and 2010 respectively.”
  • There’s a unique market mechanism that creates a consistent growth curve for fine wine values. This is the reason why wine has little correlation to other asset classes in terms of volatility.
    • A set amount of cases produced and a set price at the time of release, plus added maturity by aging in your cellar, creates the demand with prices soaring, given the popularity of the brand you’re storing.
    • The more rare and expensive, up your investment goes.
    • Think Bordeaux Grand Cru classés.

If you don’t know a lot about fine wine, find a wine investment management service that does, like Wine Investment. By-the-way, they’ve also partnered with Cult Wines Limited. They’ll help you to navigate through the muck and the mire, also assisting to manage your portfolio. It seems to me that if we’re going to be investing for the long haul, I don’t want to trust very much to my own instincts… Although, I hear a Screaming Eagle is worth the investment… But I don’t want an entire collection of Screaming Eagle. Do you? (Forget I asked.)

On WineInvestment.com’s Website, a page called En Primeur, you can access all the latest news and reports, as well as submit your interest in purchasing wine from the 2011 vintage. In the first week of April, the Cult Wines team traveled to Bordeaux for the annual En Primeur tasting, which now gives you their first-hand knowledge and views of the vintage for their personal recommendations.

If and when you’re ready, there are credible people to help you with your investment. If you’ve spent the money to have a fine wine cellar, don’t fill it with a lot of $7 bottles of wine to impress your friends, if you also have your own a Ferrari in the yard (like the one I saw once in Florida that made me chuckle).

Go all the way, and you’ll always have your own portfolio worth writing home about… and not make people like me chuckle.

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