How to Invest in Wine

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An image of racked wine bottles with the text How to Invest in Wine overtop.

Wine investment is a big thing these days. In fact, in the past ten years, the value of wine as a luxury asset has increased 147% according to Forbes. While we all know we’re supposed to have a diversified investment portfolio of stocks and bonds, there’s a whole world of assets out there to invest in, assets that don’t always follow market dips. Wine is a good example, but do you really expect your financial guy to pick out wine for you?
Don’t worry. With just a few simple guidelines, you can build a wine collection that doubles as a killer portfolio.

Ratings, Rarity and Research

The first step is to figure out what wine will end up increasing in value sometime in the future. There’s a fair amount of chance here, but this part can actually be pretty easy. Just imagine you’re picking out a bottle to share with a good friend or to open for a special occasion.

  • What are the pros saying? Check critics’ ratings for the scores and tasting notes. While you might not always agree with the professionals, it’s as objective a yardstick as we have. And remember, those scores will be around for a long time online, so in twenty years when you might want to sell a bottle, some of those scores will still be floating around. Robert Parker, Jancis Robinson, Antonio Galloni are the big names, but check out CellarTracker, too, for crowd-sourced reviews.
  • How hard is this bottle to find? Rarity is a key in determining whether a bottle is worth drinking or worth cellaring. Just like your friend might be impressed by a hard-to-find bottle, the market’s gonna love it, too. Some producers bottle only a small amount anyway, so targeting them is the best way to get to rarity quickly.
  • What’s the deal with this producer/region/vintage? Do some detective work and find those opportunities for special vintages, under-the-radar producers, or up-and-coming regions. Use Liv-ex for price history.

Now, you might be thinking: So, all I have to do is buy the rarest bottle that all the critics love? What could be easier!

Obviously, it’s hard as hell to get on the most exclusive mailing list and buy a case of that Bordeaux that everyone raves about. The trick here isn’t to know isn’t to know what to buy before it blows up, the trick is to pick the ones that have the potential to hit it big and then store it the right way.

Where to Get the Wine

You’re not going to start buying bottles for your investment in the wine aisle at Costco, right?

  • Get on those mailing lists as soon as you can. Some will make you wait to get an offer, so start now. It’s really the best way to get some sought-after bottles at good prices; otherwise you’ll be paying secondary prices and that sucks.
  • Make friends at your local wine shop. A helpful retail store can help you not only in selecting what you want, but guiding you to what you didn’t know you needed. The people who work at a good wine store are like a big brain of wine knowledge. Use their brain! Also, you never know what goodies might become available for loyal, friendly customers.

How to Buy

Once you’ve narrowed it down to producers or regions and have the chance to buy, here is where the rubber really meets the road.

  • Buy wine that you can actually age. High tannins and acidity are your friends here because those wines will get better in cellar for 10-20 years. Add bonus: in that time, your bottles will also  become more rare as other bottles are opened or damaged, giving you the best return on your investment.
  • If you can buy a case, buy two. An unopened case will go for a lot more than the bottles individually.
  • Diversify your collection. Remember when Bordeaux was king and Burgundy came for the crown? Who knows which wine is going to rise to the top in the next decades so it’s always a good bet to find wines from different regions that have potential to become superstars.
  • That being said, a lot of investment-grade wine sold these days are Bordeaux Grand Cru, Burgundy Premier Cru, Italian Super-Tuscans, and California cult wine, so make sure you take a look at these and see if they’re a good fit for your collection.
  • On that note, remember you’re going to pay a lot for some bottles. Let’s face it, they’re not all gonna be hidden gems waiting for you to find them. Those big name, cult status, level 20 wines are never going to go down in value, but you’ll pay a lot upfront. So, if you can, go ahead and splurge every so often and put a Lafite or Screaming Eagle in your cellar. It can become the centerpiece of your portfolio. Just don’t do it too much.
  • After all that, I’m going to say it: stick to a budget. It’ll be tempting to buy up an allocation or cases of something your brother’s accountant’s cousin says is really hot, but this is an investment and, in order to minimize risk, you can’t go and spend all your money on wine. Sorry!

Store it Right

Once you’ve got those bottles, you need to make sure they’re still going to be good in the future. Proper storage can mean the difference between seeing a return on your investment and losing your shirt. You can check out how we store our own wine in our warehouse here.

  • Store wine like this: 70% humidity, 55°F and no sunlight! If you have a cellar, you are ahead of the game. If not, your basement or closet in areas with a moderate climate will do. You could also go for a wine cooler or even look into professional storage lockers, although that storage fee is going to eat into your eventual payout.
  • Keep all the paper. Documenting the provenance of your wine can be extremely important if and when you decide to sell. Proof that you bought straight from a producer or a respectable store will make your wine stand out in a marketplace that is deathly afraid of fakes.
  • What about insurance? If you have a wine collection that requires insurance, you keep being you. As for most of us, time will tell as your collection grows. Talk to your insurance agent as policies can vary quite widely.

The last step is the easiest: just wait for your investment to age. If you did your research, you should have an idea of when your bottles are at their best and ready to sell. Try not to drink it all before then!

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