Many wine purists find the idea of purchasing wine in the hope of turning a profit about as sacrilegious as placing Chablis in a can. However, for the wise investor, the math tells a different story. For instance, a 1990 Chateau Latour bought for $95 in 1994 is currently worth about $700.
In many ways, wine is a perfect investment with high demand and limited supply. Wines improve with age, and for the show-off in you, a fixed-rate annuity will never compare to the seductive qualities of a good aged wine. Paul Ernst, senior wine appraiser at Bacchus Resource Management, says that wine investors often score an annual return of 15 to 20 percent – huge in a market when stocks remain flat.
So how do you get going? There’s a few things to consider. After all, could anything be more disappointing than to lay back a bottle of wine for your grandchild, only to have it become spoiled? The general rule of thumb is to seek out the “finest wines from the finest vintages”, but increasing attention is also being placed on European classics. Here’s what you need to know to begin your balanced wine portfolio.
Your Wine Portfolio
The following wines should be considered first in purchasing your investment wines:
Bordeaux – This region has enjoyed the lion’s share of attention in recent years. The interest in Bordeaux wine grows by the year. Your best opportunity comes from the first growths, but don’t discount their other high-quality wines which are of interest to buyers because of their aging potential.
Burgundy – Getting your hands on a bottle of fine burgundy can be more difficult than finding a quality Bordeaux. Because of this, these wines will appear less frequently at auction, but have achieved world status. If you can find one, grab it!
Port – Nothing will hold up the way that good port wine does. Any cellar portfolio should contain port wines. Look for vintages, which are declared only in the best years. As with Bordeaux, first growths or “first division” wines will attract the greatest interest. If you’re in the market for port wine, though, definitely seek some advice. The market for mature port has proven more volatile in the last decade than for any other region.
Rhone – This is not a traditional investment region, and you might get some funny looks when you include this wine in your portfolio. However, the recent surge in popularity for Rhone wine has led many buyers to take an interest in this very long-living wine. Top level cellar-life goes to cote-rotie and chateauneuf-du-pape.
Italy – Wines from this region have only recently come into the spotlight. Their star wines come from Tuscany and Piedmont, and a growing global interest in these wines has led to significant market demand.
Laying Down Wine for Children
When you’re not looking so much at the investment value, the number of choices to purchase from is surprisingly wide. Taking a look at red wines like Bordeaux and port are still traditional, but the naturally sweet wines of the Loire, Germany, and Hungary shouldn’t be overlooked.
Longevity is the main goal when selecting wine for children, grandchildren, and godchildren. In general, you should go for the expectation of 21 years, but a longer target will give flexibility over decisions on whether to consume or resale the wine. Before you buy, take a look at these recommendations:
Bordeaux – A natural, traditional choice because the wine itself is so widely accepted. Make sure that you get some advice on this, though, as the longevity of the wine will depend largely on the vintage.
Port – Overall, this is the most traditional choice. A good vintage port has an almost indefinite life. Increasingly, the top port wines are sold in six and twelve bottle cases, offering additional flexibility in choice.
Mosel/Tokaji/Loire/Alsace – White wines shouldn’t be ruled out when gift-giving. Certain sweet wines that benefit from high levels of natural grape acidity when young have a remarkable aging potential. These shouldn’t be considered investment wines, but wines such as vouvray moelleux, mosel auslese, Alsace vendages tardives, and tokaji aszu can live for decades.
Special Considerations when Investing in Wine
When you start investing in wine, you need to keep up to date with planned releases, knowing who is making what available, and when. One of the best places for gathering and staying up on this information is available online, listing upcoming wine release dates and offering an email list so you can get updates delivered to you. Check out New World Wine Maker to get started .
- Focus on the top wines from the best vintages. Only a fraction of the wines produced worldwide will increase with value over the years of storage.
• Store wine correctly and, preferably, in professional temperature controlled cellars. If you do not have access to a wine cellar, there are hundreds of companies willing to store your wines for you at a very reasonable rate.
• Take advice from established and reputable retailers.
• Research what fine wines have performed well in the past so that you can start recognizing those which consistently earn strong returns