To some people, wine is just another drink they can enjoy, like their favourite soft drink or even water. However, to a few of us, wine is our passion. Whether we’re buying, collecting, or drinking, we put a lot of time and money into purchasing the best that the wine world has to offer! However, there are still some of us who do not actually buy fine wines to drink or enjoy. Rather, it is for investment purposes, much like investing in stocks, gold, and other things.
That said, if you’re one of them, you need to be prepared before you get into the world of wine investments. So, with that in mind, let’s talk about everything you need to know before you start investing in wine to achieve success:
1. Be Ready to Wait Up to a Decade
One of the biggest things that you need to know about wine investment is that it does not happen overnight. In fact, if you’re looking at the long term, it could take you up to a decade before you start seeing returns on your investment. That is to say, from the time you purchase a bottle of wine to the time you see any profit from it, you could be waiting for a very long time!
While this could be frustrating for new investors, it also means that you can buy wine at a low price, age it for a few years, and then resell it at a higher price, given that the wine is of good quality! This way, you can benefit from the wine investment without actually drinking the wine that you purchase.
Fine wine is a medium to long term investment, with most investors waiting a minimum of three to five years.
2. Know How to Select Wine Quality
Before you even think about investing in wine, you need to know what to look for. Sure, you could just buy whatever wine looks appealing to you, but if you do that, you’re likely to lose a lot of money along the way. There are numerous factors that go into choosing the right wine to invest in, but most of these things are invisible to the naked eye.
Do your research on the region, producer and the wine. Wines that are well-regarded by international wine critics which have received high scores and positive reviews will influence the market perception of a wine.
3. Know the Risk of Wine Investment
Wine investment is, by no means, a sure thing. In fact, there’s a high chance that you could lose a lot of money with this. There are two things to consider: the wine market and your own investment.
First, let’s talk about the wine market. In general, investment in wine is considered a low-risk investment with stable returns and has low correlation to other markets.
Second, you need to consider your investment. As mentioned earlier, it could take years before you start seeing any returns on your investment. Even then, if you do not care for the wine properly, or the wine has had some manufacturing defect, there’s no guarantee the wine will come out good after many years. That said, you need to be ready to wait for those returns and know that you could be waiting for a decade or more without a sure-fire way to know if the wines will turn out great.
4. Buy What You Actually like to Drink
If you’re investing in wine as a hobby, then it would make sense to buy wine that you actually like to drink. After all, what’s the point of buying wine that you don’t care for? Then, you’ll never enjoy it, and it will just be taking up space in your house.
Of course, apart from the fact that buying something you love means you’ll care for it better, if you buy a wine that you like, you can rest easy knowing that if you decide not to sell your wine later on or that the wine didn’t go up in value as you thought it would, you can enjoy its content all to yourself! This would be much better than if you bought something you didn’t like drinking in the first place, in which case you might just end up tossing them away because they didn’t go up in value.
5. Buy the Best That You Can Actually Afford
This is especially true if you’re just getting into wine investment. While you can indeed buy wine as an investment, it makes sense to keep things realistic. After all, why would you want to buy a £200 bottle of wine as an investment if you don’t actually have the money to spend?
Instead, you should start by focusing on affordable wines. Depending on your budget, you may end up with wines that cost a fraction of the more expensive wines you had in mind. So, make sure to buy the best that you can afford to maximise your returns.
If you’re a part of the wine-lover community, then you no doubt know that enjoying wine is a very rewarding social experience. After all, what’s better than enjoying the taste of fine wine with the people you care about? However, today, we’ve not discussed the social aspect of wine but rather the investment aspect.
Wine investing isn’t for everyone. Sure, some people buy fine wines to enjoy, but others buy them to invest with. In fact, some of you might be reading this article with the intention to invest, while others are looking to be better informed so you can join in on this investment opportunity. Either way, it is up to you to decide whether wine investing is a good idea for you.
If you do decide to go all in, however, you will need a lot of patience and a lot of knowledge. That’s why we’ve outlined the five steps you’ll need to take if you want to get started with wine investing. So, take action, and if you have any questions, don’t be afraid to reach out to a wine expert to learn about the wonderful world of wine investments.
Cru Wine makes buying wine easy and approachable to help customers access the quality wines they want. If you are looking for wine investment services, check out what we offer!