Oxstones Investment Club™When it comes to wine, individuals are generally aware of the fact that certain bottles, particularly the aged ones, have a great value. Sometimes, people just can’t understand how the simple process of turning grapes into a fine alcoholic beverage can have such an amazing value. Besides, they don’t seem to figure out why some wines are so expensive, whereas others are really cheap.
Quality wine vs. cheap wine
Wine results from the fermentation of the well-known fruits referred to as grapes. The quality of the wine depends on numerous factors, including soil, vines’ genetics and age, climate, and of course, the talent of the one that produces it. The climate is different from one year to another, and this influences the final product. Usually, the vines’ genetics, as well as the soil don’t suffer any modifications. But vines become older and older, and they produce less fruits. However, the difference is that the fruits are more concentrated. Plus, there are always new winemakers who have inherited the passion for wine from their ancestors. Just like in all other jobs, there are winemakers who feature better qualities in comparison with others. Therefore, all the aspects mentioned until now are mixed in order to obtain a fine wine that has an excellent quality.
There are several important countries within Europe that make wine, and all of them are struggling to offer a great quality to their wines and be the best in this industry. For this reason, they’ve personally named their procedures and vineyards in order for consumers to know exactly what they are buying. This classification permits us to immediately recognize where the wines comes from, and be aware of its quality only by taking a look at the label.
On the other hand, wines that come from the New World are not classified like the other ones. This means that the consumer is free to establish which winemakers and vineyards offer them the wines that have the greatest value. Anyway, the price is the ultimate aspect that points out the quality of the wine. But note that apart from quality, there are also other elements that influence the amount of money you have to pay for a certain bottle. For example, rarity also plays an important role and it will definitely increase price. An old wine features a superior quality, it’s rare, and it has a great value.
Are all wines the same?
The truth is, there are wines that don’t increase their quality in time. The aging potential of these beverages needs to be supervised continuously in order for winemakers to establish the maturity of their wines at a certain time. The supervising can be performed only by tasting the beverages. The outcomes of such wine tastings are carefully monitored by wine press, but also by those who invest in wine. They utilize the information gathered in order to figure out the potential value of the beverage.
Generally, the most expensive wines are sold during auctions. Within the US, the majority of these auctions are organized in Chicago. As far as other parts of the world are concerned, they utilize the auctions that take place in London as an indicator of trends for establishing prices. A real wine collector has to be aware of what happens during these auctions, and also of the actual retail price featured by the most admired wines so that he can estimate the wine’s value whenever needed. Gathering results from auctions is not easy, but luckily for everyone, there is a person who is in charge of this matter. William Edgerton is the one that gathers wine prices and publishes them in the Wine Price File. In most cases, auctions are organized to raise funds for charity; hence, the cost of the wine might be inflated in order to donate as much money as possible.
In case you are wondering if investing in wine is a good decision, here is an example. A 1961 Ch. Latour featured a price of $3 when it was released. Right now, its price is no less than $500. This means earnings of more than 15% each year for a period of 35 years.
Author Bio: The author of this article is Peter Smith. He is interested in writing about all the financial issues. His site provides extensive and exclusive information and market insights for the modern day fine wine investor, collector and enthusiast.
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