Wine Investment 101: Everything You Need to Know
Perhaps you’ve toyed with the thought of wine investment. If you’ve dabbled in collecting, it’s the next logical step. Before you decide to take the plunge, here are a few things to know.
The first question, of course, is why invest in wine in the first place? Well, fine wine can appreciate in value over time. It’s true that you won’t get any return on your investment until the wine is sold but if you’re savvy with how you buy, you can make a nice profit and drink a bottle or two to boot.
Things to Consider When Buying
There are a few basic things to keep in mind before you start buying up bottles or cases.
1. Do your homework before purchasing anything. Research vintages and get to know producers. Vintages are key. If you’re able to buy up wine from a great year, you’ll definitely make a profit down the line (assuming you don’t drink it all!). Certain winemakers are capable of creating phenomenal wines even in difficult years. You can often buy these wines at a lower cost compared to widely acclaimed vintages and still see a return reselling them years later. However, when you can, buy from the best vintages. As anyone with a bottle of ’45 Bordeaux lounging in their cellar will tell you, it’s well worth it.
2. Speaking of producers, certain ‘blue chip’ wines will almost always go up in value over the years. Typically, we’re talking about the big First Growth Bordeaux chateaux like Lafite and Mouton, as well as Burgundian winemakers like Domaine Romanée-Conti, top Barolo producers, and the Super Tuscans. For more examples, see below.
3. Hang on to your investments. Don’t be tempted to sell within the first few years. The older a wine is, the rare it gets and as the laws of supply and demand tell us, their value will skyrocket. You can follow the prices of major wines and regions on sites like Liv-ex.
4. Set out a budget of how much you’re willing to spend and buy the best you can afford within your price range. As we talked about above, you won’t see a return until you sell and if you want to make the highest profit possible, you’ll want to hold on to your investment wines for several years if not decades. You should really only invest if you can afford it. The other thing to bear in mind is that wine investment can be a gamble.
5. Cases are better than single bottles, especially if you’re able to get them with their original wine case, but if something truly spectacular comes up, a bottle can still be a great investment. Always be sure to save receipts so you can prove provenance and only purchase from reputable sellers. These days, there are a growing number of fakes floating around so it pays to be vigilant.
6. Don’t be afraid to shop around. Get the best value for your dollar.
7. This can’t be emphasized enough: store your wine under the proper conditions. Whether you keep them in your home or off-site in a facility, make sure that they’re kept in a temperature and humidity controlled room which is dark, away from vibrations, and stored under lock and key. In this way, you’ll be able to avoid faded or moldy labels, help prevent the wine from spoiling, and keep it safe from would-be thieves or thirsty guests!
8. Not sure about what to buy? You can always enlist the help of professional.
What to Invest In
We touched upon this above, but there are certain wines which are usually a safe bet, the so-called blue chip wines. These wines often have cult followings and are recognized around the world for their consistent quality and aging potential. In addition to the regions mentioned, here are a few other wines and regions to consider:
- Cult California Wines: Napa Cabernet Sauvignon (e.g. Screaming Eagle, Harlan Estate), Sine Qua Non (Rhone-style blends),
- Penfold’s Grange, Hill of Grace, and other major Australian wines. Look to Langton’s Classification as a guide.
- Port. Opt for Port from widely declared vintages.
- Sauternes especially from Chateau d’Yquem.
- Tête de cuvée vintage Champagne from houses like Krug, Taittinger, Louis Roederer (Cristal), Moet et Chandon (Dom Perignon).
- Right Bank Bordeaux, especially from Pomerol and St. Emilion.
- Rhone reds like E. Guigal’s “La La’s,” or Domaine Jamet from Cote-Rotie. Reds and whites from Hermitage.
- Top Rioja (R. Lopez de Heredia, Marques de Murrieta Castillo d’Ygay’) and Ribera del Duero (Vega Sicilia “Unico”). Look for Gran Reserva.
These are some of the classics but upcoming regions like our own Okanagan Valley are set to take the world by storm as wine lovers who are in the know are hip to. With its unique terroir, age-worthy wines, and world class winemakers, now is a good time to consider investing in Okanagan wines – before the rest of the world catches on.
Investing in wine can be a rewarding experience. Whether you choose to sell it on down the line or save your bottles for yourself to enjoy once your wines mature, you’ll be sure to learn more about wine. What could be more rewarding than that?