A simple guide to wine investment.
What to buy: We will advise you to purchase the best wines from the best vintages at the best possible prices. These wines have the most established resale market and will be trophy wines in years to come, which will attract the highest prices.
Investment term: Despite its nature, wine is less liquid than the stock market. You should be prepared to invest your money for a minimum period of 5 years and perhaps up to 10. That being said, some clients have made money in a shorter time period.
Returns: As with any investment, the value of your wine can rise as well as fall. If taken over a 10 year period, we have seen an average return of about 15% per annum. However, we have also seen some investors accrue significantly more than this in a shorter period of time.
Provenance: As provenance is essential to resale, wine storage is paramount. We will only recommend wine that is In Bond. This ensures that the case has not left the confines of a temperature controlled warehouse. A wine which has been privately stored or a case which has been split is of much lesser value.
Tax Efficiency: This is one of the major reasons that people are attracted to investing in wine. Aside from avoiding duty and VAT, some wine is not liable Capital Gains Tax. For full details on this, it is always best to speak to a qualified Financial Advisor.
The Current Market Outlook: The main driving force of the rapid growth we have seen since mid-2009 has been the huge demand from Asia. The market has thus been especially buoyant of late and recovered quickly after the downturn of the recession. Asian markets tend not to be driven by speculators, but by drinkers. As many of the top wines are consumed early on in their life, the rarity aspect is heightened. We are just seeing the start of serious interest from China, where there are an almost unlimited number of wealthy buyers, especially for premium Bordeaux. The demand is certainly commanding higher prices and as such there has never been a better time to become involved in the wine investment market. Recently, we have seen auctions in Hong Kong fetch prices well above the UK open market which is extremely encouraging.