The growth of wine investment, as an alternative to more conventional forms of portfolio has continued to rise in recent years and has spurned the growth of several Wine Investment Funds and a wide variety of resources for the wine investor. With sound advice and a broad investment strategy, the results can we rewarding both financially and on the palate!
So, can one still make a sound wine investment in this market?
Yes! The challenging economic climate does not preclude a sound alternative investment in fine and rare wines, indeed like many markets there many opportunities to buy into the ’blue chip‘ now at a discount to the heights of the market in 2007.
Whilst technology has made comparative price information available to any collector seeking to acquire investment grade wines; the research behind the price is a key factor that will protect your portfolio long term. Expert guidance allows a potential investor to make careful acquisitions by understanding the drivers of market value such as critical opinion, provenance, storage conditions and the presence of the original wooden case for the best wines.
A balanced portfolio across regions, producers and maturity, like most investment strategies, is the soundest approach. An authoritative advisor can help sort through the hype and conduct a thorough market analysis of the future price curve of an agreed basket of wines to measure potential returns.
Whilst in some instances the market for a single wine or vintage increases rapidly on an influential critic’s ‘buy’ recommendation; it is preferable to consider a wine investment as a 5-10 year investment. Past trends show us that wines often peak in value as they approach their first maturity window; when they begin to lose their youthful fruit and develop as mature wines, this for most great wines is at least 5-10 years from bottling.
The influence of the Asian market has grown exponentially in recent months, lead by the buying power of greater China’s HNWIs and the abolition of duty on wines in Hong Kong, SAR. Hong Kong has become the new hub of a growing shift of wine investment and consumption in the world’s most populous continent. Whilst for now, their tastes are limited to a few top château (in particular Château Lafite) a maturing market in mainland China will lead to a broadening of this influence.
The active secondary market in fine and rare wines, together with key indices provided by (amongst others) Liv-ex; a real-time wine trading platform for wine companies, allow investors to track the market value of their portfolio on a monthly basis. Accurate information and candid advice on a timely basis should lead to a successful sale.
At the time of sale, there are a number of routes to market that may be considered. It may be that your chosen merchant can quickly and efficiently find buyers for your portfolio or it may be that a major auction sale would increase the pool of buyers thus increasing the price. An ideal consultant would be able to understand and assess both these options and advise accordingly for all or part of the portfolio.
As the early reports of the 2009 Bordeaux vintage point to a successful harvest that will bring exceptional wines to the market next spring as futures, there seems that the potential returns and continued interest in wine investment shows no signs of abating.Of all alternative investments, wine investment just might be the most fun! Whilst financial gain maybe the central goal, the fringe benefits may be just as appealing. Many investors choose to take their dividend in liquid form! - by keeping back a few of those precious bottles for enjoyment.
In vino veritas.
No comments:
Post a Comment