What makes the wine a ‘hot investment?’

08-Aug-2013

I like this.

Be Sociable, Share!
-->

By







Buying fine wines and then selling them can be extremely profitable, as long as you know the business, and you’re ready to take chances. Whether you’re a recent graduate or a young entrepreneur interested in such a profitable yet tricky business, it’s critical to be vigilant prior to making investments. Opt for quality and if you’re a novice make sure to get professional help. Hire someone who can teach you the business, and ultimately you’ll end up the teacher yourself.

Are wine investments dicey?

Executive editor of the reputable Wine Spectator Magazine, Thomas Matthews, claims that wine investments can be risky, and the ideal wine investor is someone who can afford to lose cash before making a significant profit. Sometimes even the best types of wines can be destroyed, if they’re not preserved in an appropriate environment. In spite of all the risks that come along with wine investments, more and more young entrepreneurs have shown their interest in this field.

According to Matthews, these investments have become particularly popular after 1944, when wine auctions were finally legalized in the United States, London, and Hong Kong. As time passed, wines became a precious asset, and individuals from all over the globe began to enjoy drinking it, but also exchanging and trying the rarest varieties.

Wine investment statistics

In 2012, the total wine auction market reached the sum of $389 million, slightly lower than in 2011, but still a huge amount considering the financial recession from the past couple for years. Matthews argues that this insignificant drop was welcomed from certain points of view, and that it ought to be seen as a “market correction”.

It was also mentioned that the relative instability of the market may have been determined by China, one of the main wine importers in the world. However, because its economy has already started to stabilize, and it has a huge economic potential, it is expect to be back on the wine market pretty soon.

In spite of rumors arguing that the wine industry has also been affected by the economic crisis, hundreds of expensive wine acquisitions are made every day. In the fourth quarter of 2012, nearly 13,000 lots of wines, with a total price of $40 million were sold only in the United States. This is a clear example that the wine industry is still doing well, and that wine enthusiasts have not given up on their favorite hobby yet.

Convert your passion into a moneymaking business

All those who are passionate about wines and would like to invest in a lot of exquisite bottles, should be extremely cautious, and not rush into taking a decision. According to Matthews, young investors should spend money on wines that they would love to drink too, and it’s better to acquire full case lots, as these can be sold much faster. Similarly, he argues that if you wish to invest in wines, you need to make sure that your storage conditions are faultless, because it would be a pity to pay thousands of dollars on a wine bottle, and then leave it to spoil.

You should also become familiar with the provenance, or the chain of ownership of the wines that you intend to invest it, and make certain that the wine comes from a specialized wine-producing propriety or a reputable collector who sells only authentic products. Don’t pay too much per bottle either, just take a look at the market and selling prices on other similar products, and then select something that looks appealing to you.

Wine is definitely a very hot investment these days, whether we’re talking about selling or buying. Wine sales have grown all over the world, and according to a recent survey, the Unites States is currently the main consumer on the market. Americans drink nearly 13% of the total amount of wine produced on the globe. China is also rising fast, and is expected to become a dangerous rival for the US. But they have a greater disadvantage: their counterfeiting wine businesses.

Investing in wine is not an exact science, and all you can do is wait to see what happens. Still, if you’re planning to create your own stock of qualitative, top wines, then you should start looking for your favorites, and think about what you would like to invest in.

 

Be Sociable, Share!
Tags: , , , , , , , , , , , , , , , , , , , , ,

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*

Subscribe without commenting









Loading...
Join Oxstones Investment Club's Daily Newsletter