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Tuesday, February 26, 2013

Tips for fine wine investment

By Bill Weston

Approaching wine as an investment is a practice which can pay off in many ways. There are few investments that can be enjoyed with a fine meal when your money is doing well. A wine investment is something that has many dimensions to consider as you become more heavily involved with the industry and is not something to be taken lightly.

It’s a practice that requires knowledge, patience, and a discerning palette. As a consumer, it’s important to understand what actually makes a wine valuable as it’s not simply the age of the bottle or the region from which it was imported and depends upon the intricacies of the actual wine market. 

Winemakers are an asset to the wine industry
Wine quality is a key determinant of investment value
To judge the quality of a wine specifically as a wine investment you must begin by looking at several key factors. The vineyard from which the wine came from and the skill of the winemaker are very important factors as well as the genetics of the vine that produces the grapes.

However, as the vine ages, the number grapes it will produce lessens and the availability of the raw material affects the value of the wine itself. The skill and reputation of the winemaker responsible for the vineyard can also play a key role in the fluctuation of the wine price.

A fine wine investment is not a totally apolitical atmosphere and wine investment can seriously impact the exports of any region. For this reason, there are constant attempts made to justify the superiority of any particular region's products over another.

There is the taste of the wine itself versus the weight of the name actually placed on the bottle and sorting through the factors leaves one bottom line: price. This is the universal determination of quality as the scarcity of a wine does not impact its flavour, but it does impact its price tag.

It’s also important to recognise that not all wines improve with age and it does have an upper age limit when it comes to taste. Judging the position of a wine on its arch of maturity can only be done through tastings and the wine press usually takes it upon themselves to conduct these tastings and distribute the information.

The close monitoring of a specific release will be the source which collectors depend on to determine the price that they are willing to pay. Once in the market, receiving a return on your fine wine investment is typically done through auction and these auctions play a large role in controlling the fluctuation in price of collector grade wines.

About the author: Bill Weston writes on a number of subjects including fine wine investments. You can find out more about investing in fine wine at http://www.boltonsinvestments.com/

Image attribution: SmartPhotoStock; free license