A Smart Investment: How to Invest in Wine

This post answers the following questions

1) How to invest in wine?
2) Why should you choose Highly-Valued Wines?
3) How to start the investment process?
4) What are the guidelines to smartly invest in wine?
5) What is wine futures?

With global financial markets constantly in a state of flux, it can be extremely difficult to pick winning stocks and bonds. Instead of investing by following traditional routes, many wine aficionados are turning to wine as a source of financial investment. A profitable wine can increase in value by several percent each year, pulling in profits that easily rival those of high risk financial bonds. Before buying up every bottle at the local supermarket, it is important to understand how wine investments work. Use the following guidelines to smartly invest in wine and ensure the future of the product in question.

wine bar in San Diego

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Choosing Highly-Valued Wines

Not every wine will ultimately produce a profitable return. This makes it essential for would-be wine investors to carefully consider a particular wine’s worth. There are several ways to expertly determine this value. One such factor is the critic’s rating assigned to the wine.

Wine critics taste new bottles each season, commenting on characteristics like the taste and appearance of the alcohol. These ratings are generally scored on a scale of 100. Although buying a wine that has been highly rated could potentially result in future profits, many wine investors instead gamble on bottles that have not yet been rated. Assuming the eventual rating is favorable, the bottle’s worth skyrockets.

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Starting the Investment Process

Developing a relationship with a highly-skilled wine retailer is often the best place to start. Wines purchased from a retailer who has experience with wines from a particular region can provide paperwork that could prove vital in reselling the bottle in the future. Should an investor wish to find a particular wine, retailers can often help track down the product in question.

Some investors purchase from online merchants, although such sales can be tricky to maneuver. Wine counterfeiting has occurred in the past, with unsuspecting buyers receiving sub par wines instead of the premium products they have purchased. Before making a purchase online, it is important to verify the web merchant’s history and reputation.

Considering Wine Futures

Instead of purchasing the bottles themselves, some buyers instead choose to invest in futures. Wine futures refer to a product that has not been harvested or bottled. Purchasing wine in this manner can be a good way to obtain the cheapest price on a particular product, although the future value of the wine in question is not guaranteed. Furthermore, these wines will not become available for some time, making it essential for investors to remain patient.

Examining Supply and Demand

The demand for fine wines is constantly on the rise, as wealthy buyers and Michelin-starred restaurants purchase these bottles frequently. As the number of bottles dwindles, the value of the remaining wine rises expontentialy. Before selling a wine that has been purchased for investment purposes, it is important to take factors like supply and demand into consideration. This will help ensure the price the bottle demands is the highest possible, and in turn, the most profitable for the investor.

Choosing to invest in wine is a decision that can be taken for many different reasons. Whether looking for a wise monetary investment or simply hoping to score a fine wine at a rock bottom price, the world of wine investments is quite complex. By playing close attention to the market and working with trusted wine sellers, would-be investors can help to minimize the potential risks of investing in these products.

Rita Pirkl is the current owner of Village Vino – a wine bar in San Diego. She has also held executive positions in sales and marketing at Chateau Montelena Winery and Peju Winery, both in Napa Valley.

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