Fine Wines are a Hot Investment Right Now

Wednesday 11th October 2017 - Della Bentham

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Fine Wines are a Hot Investment Right Now

The hottest investment right now seems to be fine wines, according to the latest figures from the Knight Frank Index.

When it comes to investments, there are people who decide to invest their hard earned cash in physical goods rather than stocks and shares. The objects of choice are commonly art, coins, stamps, jewellery, classic cars and so on.

 

The Knight Frank index, tracks the price growth of ten luxury investment sectors. They’ve been monitoring these sectors for a decade now and release their figures quarterly.

 

Classic cars had been performing quite well, but have now been overtaken by jewellery, the most noteworthy change on their most recent release however, was wine, which saw a 25% growth in the last 12 months. It’s the only item on the list to have risen by double digits in the past year, which makes it even more impressive.

 

It seems that times are changing. So, what is it about wine, that’s proving so popular?

 

Well, the desirable wines are produced in limited numbers, it’s this exclusivity that makes them desirable to investors. Wine is also something that has a certain air of sophistication around it. It’s certainly more interesting than the more conventional investments such as stocks and shares.

 

As with any investment though, wine requires plenty of research and ideally advice from a professional expert before making any big purchases. All investments carry a level of risk, the future cannot be seen and values could potentially fall instead of rise. So, what should you be looking for?

 

Michael van Deventer, Vinoteque and e-commerce manager at Distell says:

 

“While iconic wines tend to be produced in smaller volumes, this is not the only factor to consider. When selecting an investment wine, it is important to look out for the best vintages, awards that the wine has won and possibly most importantly, ageability.
 
Therefore, in order for a wine to reach a status whereby it can become an investment, it needs to reach maturity and rarity first.”

 

Our top tips for investing in wine:

 

  1. Only invest what you can afford to lose. All investments come with a risk of loss instead of gain, so don’t spend money you are likely to need for your daily living expenses. With wine, at least you can drink it if all else fails.
  2. Purchase the best you can afford. The safest bets are usually Chateaux or Bordeaux.
  3. Stay up to date on values. Make sure you sniff out the best deal possible, in the hope of a larger return on investment. Liv-ex shows the global market price for fine wine it’s an invaluable resource.
  4. Invest for at least 5 years. Buy with a medium to long term view when investing in wines.
  5. Store your wine professionally. Wine needs to be stored professionally and correctly under the optimum environmental conditions such as humidity and temperature to keep it at its best, otherwise you risk running your investment.
  6. Be aware of the tax benefits. Speak to a financial adviser about the benefits of investing in wine to make the most of your investment.
*Image taken from: Knight Frank Luxury Investment Index Q2 2017 Launches