Small-scale fine wine investments are increasingly popular, especially in the UK. What was once a select investment opportunity, limited to wealthy connoisseurs, has now become much more accessible. The Internet, the growing number of investment trusts, and the greater amount of information about fine wine available have all contributed to bringing wine investments closer to mainstream. Yet investing in fine wine is not without its risks. Here's some food for thought.
Great Wines in Great Years Are Most Rewarding
Not all fine wines can make you rich. Truth be told, most bottles, even well-know ones, bring moderate revenues, and only after they reach maturity (at least a few years). Only the top bottles from prestigious vineyards bring fantastic profits, and these are hard to get. The safest bet is to invest with care in lesser fine wines, and to be realistic. And don't forget that you can always drink your wine instead of selling it.
Buying Wine Before It's Bottled Is Risky
Many fine wine investments these days entail that you buy wine before it's bottled. This is a common practice especially when it comes to Bordeaux wines. Know as 'futures' by insiders, this type of investing riskier, especially for starters. There are many variables involved here, such as final quality, demand, market price fluctuations, and so on, all of which need to be carefully considered. This is not too say that 'futures' are to be avoided; not at all, they can be the most lucrative investments. Yet they must be indulged in with great care.
It May Be Trickier With New World Vintages
American fine wine investments may be particularly challenging, because the vintage makers in the US are not as firmly established as those in Europe. There are famous California red producers, such as Opus One and Screaming Eagle, yet the prices are much more fluctuating than in the Old World. The chief factor that sets wine price in the US is not wine maker prestige, but demand. For a UK investor it can be harder to keep up with all the developments of the US market. There always, of course, exceptions.
Wine Lovers Are Less Likely to Regret Their Investment
Finally, you have to keep in mind that fine wine investments, just like any other types of investments, can always fail to bring you the expected returns. In such a scenario, are you ready to put your worries aside and enjoy a glass of fine wine, from the bottle in which you invested yourself? If not, then you may be better off considering other types of investments, such as those in contemporary art, silver, or gold.
If you are looking for best alternative investments, experts at Compare the Financial Markets will help provide valuable assistance.
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