Over the past years, more and more people are investing in wine as a means to diversify and hedge against inflation. But many financial advisors have no idea how to get started or what to look for when researching wine stocks. As a result, they are passing up a unique investment opportunity that has been lucrative for decades.
Investing in wine is one of the best ways to beat inflation. Wine has also outperformed many other asset classes, including real estate, stocks, and bonds. Financial advisors should also know that wine is not a new investment opportunity.
The Grapes of Investment
There are more than 130,000 different types of grapes in the world. Only about 4,500 are suitable for growing in wine regions.
And of those 4,500, only a handful are used for good wine. Because of this, wine producers are highly selective about the grapes they use.
In order to be a great wine, the best grapes will be planted and harvested in the best locations. But, even then, the winemaker has a limited amount of control over the quality of the wine.
Over the next 10 years, value investors will see great returns with investment-grade wine. That is because wine has performed well over the past decade, while other investments have not.
What Is Fine Wine Investing
Fine wine is an investment in the ownership of wine. It can be stored in bonds, traded on exchanges, or sold directly to consumers.
It is typically stored in cellars and is produced in limited quantities. It is usually sold at auction or privately in transactions that are often brokered by auction houses or third-party firms. Fine wine has been an asset that has grown in value over the years. This is why the wine market is highly liquid and continues to increase in value.
How To Invest In Fine Wine
There are two main ways to invest in fine wine: buy wine and store it at a warehouse, or trade it on an exchange.
Fine wine can be held in storage for as long as the owner wishes. It can also be sold at a later date. This method allows investors to leave the decision to sell the wine up to an auction house, without the worry of additional fees.
What Vintage Should You Invest In
Investors should always choose an investment vintage that is their favourite. This will help them to properly care for the wine and will make it easier to assess the value of the investment.
Good wine is timeless, so an investment vintage can be enjoyed for many years without worry.
What Are the Best Wine Stocks to Buy
Wine stocks have been a great investment for many years. That is because wine is a good hedge against inflation. While the overall economy is not growing as fast as it should, wine production and consumption are increasing.
To help investors pick the best wine stocks, they must first decide what type of wine they want to invest in. This could be specific regions, countries, or varietals.
Next, investors should look at the wine’s price to determine if it is undervalued, which will allow them to make money when it increases in value.
Investors should also do thorough research on their wine stocks. This should include looking at their financial statements, studying them, and performing financial analysis.
Lastly, investors need to make sure that the company producing the wine is solid. This should include studying their management and making sure that they have a history of making good wine.
Risk vs. Reward with Wine Stocks
Many are investing in wine stocks to hedge against inflation. While this can be a good strategy, it must be done with care. In the same way, you would pick individual stocks, you have to pick good wine stocks. This includes analyzing everything from management to the wine itself. Without proper analysis, you will be at risk, possibly losing money.
Bordeaux and Burgundy
Bordeaux and Burgundy, two of the wine world’s most prestigious wine regions, are more than just great wines. They are also real estate and infrastructure plays. Today, investors can purchase a bottling facility in Bordeaux, or a vineyard in Burgundy. If done correctly, value-based investors could see outsized returns.
Sustainable wine is a wine that is grown and produced in an environmentally-friendly manner. While not specifically sustainable wine, the California wine industry is now one of the most sustainable in the world. As a result, it has become the benchmark for sustainable wine.
Over the past few years, the sustainable wine movement has caught on with consumers. In fact, many wines are now being labelled as “eco-friendly” or “natural”. But to be truly sustainable most of these wines are farmed using industrial methods, which is in direct opposition to the movement.
Only a handful of growers are truly practising sustainable wine. This is why sustainable wines are so rare and hard to find.
How to Choose Sustainable Wine
The best way to find sustainable wine is to seek out wines produced by biodynamic vineyards. This is a method that many growers have adopted.
These wines are grown using organic farming and sustainable methods. They are also biodynamic, which means they celebrate nature, however, they are not made biodynamically.
Biodynamic wines are made using organic farming methods. These wines are not grown using crop sprays, fungicides, or herbicides. The growers rely on natural methods such as cover cropping, crop rotation, and compost.
Biodynamic wines are made using a method that is based on a holistic approach that combines spiritual and scientific thinking.
Why Buy Investment-Grade Wine
Buying wine is unlike buying just any other commodity. You will not be able to find it at a grocery store or a big-box retailer. And it certainly won’t be found at a convenience store. The only way to buy good wine is to buy from an authorized wine merchant.
But, before you buy, you must be sure that you are getting investment-grade wine. If you buy wine that is imitative, you will lose money.
In order to be an investment-grade wine, it must be stored in a climate-controlled environment, where it can be properly stored for decades.
Wine investment is not for everyone. But, if you have the patience, wine investment can be a good way to beat inflation and make capital appreciation.
Get Your Wine Investment Ready
Investing in wine is an ideal way to diversify your portfolio and make money. But, it is important not to get overconfident because wine can be volatile. This means that you should only invest what you can afford to lose. If you follow these rules, you will be well on your way to a successful investment.
Cru Wine offers the best fine wine investment for financial advisors. As a wine investment partner, we provide you with top-class wine investment opportunities in the best wine regions in the world. Let us invest on your behalf. Contact us today to get started!