Many people who enjoy drinking wine think about the possibility of investing in fine wine. There are a lot of questions, though. How can you know which wines will appreciate in value, or what you can expect them to be worth sometime in the future? How do you handle practical matters like buying, storing, and selling wine? Here are some tips about getting involved in this growing investment market.

What are your goals?

Some people dabble in wine investing. They find wines that they enjoy, and buy those, in the hopes that they will go up in value. It’s more of a hobby than a business for them. They may drink a few bottles now and then, and if there’s no big profit at the end, it’s not a bad problem. After all, they still own wine they enjoy drinking.

For other people, wine is a serious investment. These people are more apt to limit their purchases to investment grade wines and have them stored in a bonded, climate controlled warehouse while they mature. They won’t be drinking this wine – it is purely for investment purposes. You can’t become a wine investor over night, and you certainly can’t make profit in a couple of months. For an investor to reap great benefits from fine wine, he must have patience.

Storage options for your wine

As a hobbyist investor, you may want to store your wines at home. If you buy small quantities, this can make sense, but only if the wine is kept in ideal conditions. When you want to store wine for a period of years as it matures, it needs to be kept under properly controlled conditions. If it gets too cold, it can produce flaky crystals in the wine. If it gets too hot, it can develop faster than it should. Either way, you won’t end up with the ideal wine to sell.

For home storage, you can use either a wine cellar (if you have a suitable area in your home), or a wine cooler that gives you temperature-controlled storage. Some cities also have wine storage facilities that you can rent. Serious wine investors generally have the wine sent directly to a bonded warehouse, where it is kept until the time to sell it. This maximizes the value of the wine, since you have an unbroken chain showing that the wine was properly handled and cared for from the winery through its entire life. Buyers will pay more because there is no chance for fraud, tampering, or wine spoilage due to improper storage.

Researching wine values

Two of the primary factors that determine the value of a wine, both now and in the future, are the wine ratings, and its scarcity.  Ratings are set by wine critics, who judge each wine on a scale of 1 to 100. Wines over 90 are good, and wines that reach 95 and above are considered to be high quality. Be sure to read reviews from more than one critic, since ratings may vary.

Scarcity is initially set by the production from the winery. As time goes by, the quantity available decreases as some of that wine is drunk. Therefore, as the wine ages, it becomes scarcer, which usually leads to higher prices. There are websites where you can research the price history for different wines, and get an idea of how they have typically performed over time.

Recent trends

Experts are optimistic about fine investments this 2014. Some areas are still recovering from the recession, yet the numbers look promising. Last year, there was an increase of 3% compared to 2012 in the US, where over 375 million cases were shipped overseas. The estimated retail value was $36.3 billion, which made the US the world’s largest and most powerful wine market in terms of profits. 34% of the sales were imported, 57% came from California, and 9% from the remaining states.

On an international scale, Europe is still in the lead. If you want to invest in fine wine, start with Bordeaux wine. There’s no point in taking chances if you’re not an expert. The industry is constantly growing, and apparently, increasingly more people are turning their attention to this tax-free type of investment. Just like with any other type of venture, investing in wine is not a sure thing; the good news is you can always drink the wine if you can’t sell it.

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