Wine Investment Considerations
What makes a good wine investment?
There are a number of key factors to consider when creating a wine investment portfolio. The selection of wines is, obviously, fundamental in achieving potential investment returns. This is where GVWM can help - using our experience we will assist in obtaining the best investment portfolio to suit your personal needs.
What to consider when investing in wine:
- Wine is not usually an asset which returns a quick profit and we would normally advise a minimum investment period of between 3 to 5 years and preferably 10+.
- To maximise profits and maintain the highest level of provenance, wines should be purchased and stored under bond. This enables the buyer to purchase the wines before they are in the system for duty and VAT. They can then be sold on under bond, without duty or sales tax being charged.
- When buying for investment it is advisable to purchase the best you can afford. Broadly speaking, this means the top names, in the most highly rated vintages.
- Blue-chip Bordeaux is the most liquid category for fine wine investment, with an established international market for the wines. This translates to First Growth and ‘Super Second' Growth Bordeaux and the top names from the Right Bank.
- Over the longer term, large format bottles can often outperform standard cases of 750ml bottles. This is an area where we specialise.
- Buying as futures (i.e. en primeur) is often the best way to get hold of the most sought after wines before they start to appreciate. This also gives the buyer an opportunity to select the bottle format. However, it is still worth buying earlier vintages of high profile wines which have the potential for growth and have high scores.
- Most wines which are of investment grade are reviewed by independent critics such as Robert Parker (‘Wine Advocate') and James Suckling (JamesSuckling.com). The reviews and scores (out of 100 points), which these critics give can have a profound effect on the value of a wine and should be taken into consideration.
- Past performance of a particular wine in previous similarly rated vintages can be a guide, to some extent, as to how a current vintage might appreciate.
- Certain wines have strong followings in particular markets around the world and can be subject to fashion and brand status. This can have an important effect on supply and demand, as recently evidenced by the Chinese demand for Lafite Rothschild and its other wines; Carruades de Lafite, Clerc Milon.
- Provenance is important and stock sourced directly from the Chateaux carries a premium. Physical condition is very important, especially for older vintages.