If you are one of the many savers who have increased their ‘nest egg’ since the start of the pandemic, you could be looking for somewhere new to invest your money and ensure a far greater return on that investment than the traditional investment alternatives.
Liquid assets in the form of fine wines tend to be less volatile than other markets and can produce a greater return if done right and at scale. In fact, the fine wine market is booming since the pandemic.
Becoming a wine investor and collector is very different today than even just a few years ago. There has always been a particular image of those with a wine portfolio with large mansions and cellars in the countryside. Still, the twenty first century wine investor is an entirely different breed.
Starting a wine collection can now be done from the comfort of your own home, in many cases via a website or app. If buying in large quantities, the storage and security can even be taken care of for you. All you have to do is decided on a starting amount (we recommend at least £5,000) and then do your research or get advice from an expert to ensure you are investing in the right wines and at the right time.
CAN ANY WINE INCREASE IN VALUE OVER TIME?
Sadly, no. If that were the case, there would be many unknowing wealthy folks worldwide with a wine rack full of £10 Merlot from 2006. Unfortunately, these wines not only tend to depreciate in value but also in taste! Even most fine wines depreciate over time. As with anything collectable and investable, rarity and popularity are key. Age itself does not a fortune make.
Decanter reports, “The classic names are ever-present. Auction house Sotheby’s reveals that its 10 best-selling Bordeaux estates in 2019 were, in order: Mouton, Petrus, Lafite, Latour, Haut-Brion, Margaux, Cheval Blanc, La Mission Haut-Brion, Le Pin and Léoville Las Cases. However, an expanded secondary market provides more potential opportunities, making it easier for collectors and investors to buy and to sell. Buyers are also presented with more choice because many châteaux across Bordeaux, spanning the growths from first to fifth, have improved their winemaking thanks to increased investments in vineyards and cellars. While Liv-ex doesn’t speak for the whole market, its Bordeaux 500 index – tracking prices for a range of classified estates across the Left and Right Banks – had increased by nearly 30% in value in the last five years at the time of writing.”
HOW DO I PROTECT MY LIQUID ASSETS?
The greater your investment in the wine you purchase, the more important it is for you to verify the provenance. The history of the wine and how many times it has changed hands will either help make the wine more or less desirable and increase or decrease the value.
Fake premium wines exist worldwide, which is why it is vital to purchase your wine through a reputable merchant or a fine wine expert.
Storage, insurance and security are all the keystones to protecting your fine wines and ensuring they appreciate over time.
Here are four wines that are gaining traction in the fine wine investment market and would certainly be worth adding to your portfolio or ideal if taking your foray into wine investing.
2015 Tenuta Argentiera ‘ventaglio’ Toscana Igt, Tuscany, Italy
2018 Screaming Eagle, Cabernet Sauvignon, Oakville, USA
2017 Domaine Fontaine-gagnard Criots-batard-montrachet Grand Cru, Cote De Beaune, France
2018 Domaine Fontaine-gagnard Criots-batard-montrachet Grand Cru, Cote De Beaune, France
Sotheby’s auction house very kindly provides a wine indices chart that helps you compare the performance of the fine wine markets. As you will see, there has predominately been a steady incline over the past 16 years and certainly in comparison to traditional investments.