Investing along the vine

Investing in wine is becoming an increasingly popular choice for those looking to diversify their portfolios – and for good reason. Daniel Elswood writes

 Investing along the vine

‘Wine investment generally produces positive returns every five years or so, so prepare to maximise your returns with a medium to long-term strategy’

The value of wine has climbed steadily since 2013, with a steep increase in over 20 percent in the past year, and it is considered by most to be immune to the volatile stock market.

However, investments in wine, just like other commodity come with risks, but with the right information, you can make informed decisions on what and when to buy.

Develop your palette

For those who choose to invest in wine – learning the basics is crucial. Firstly, attending wine tastings is a great way to develop your palate, expand your knowledge and meet other investors and sommeliers who equally share your love of the grape. This free flow of ideas and advice is hard to replicate anywhere else.

With a heightened palette you will be able to identify the best wines to invest in based on taste, look, smell and feel, while expanding your cultural knowledge which will help you avoid the pitfalls that many early investors fall into.

Vintage reports

For any budding investor, it is vital to understand the basics of wine and how to identify the quality and character of each. This is where vintage reports come in. They are an effective way of finding detailed information on every wine from details on the grapes, growing seasons, weather reports, harvest conditions, style, character and region as well as vintages from past decades to today. If you are faced with unfamiliar wines or are looking to determine when a wine will drink well, these reports will be incredibly useful to help understand your investment.

Use technology to support your investment

There are a number of apps that can help expand your knowledge and accelerate your education in wine, like a trusty pocket-sized sommelier. Image recognition software can scan bottles and connect you to a huge database of more than 1 million wines from around the world. Others can help pull up ratings, reviews and tasting notes from hundreds of other wine enthusiasts to keep you up to date with the latest news and trends from around the world.

Keep a pen and paper handy

Once you have attended a few wine tastings you will realise the importance of note taking and how to balance taking note while being bombarded by glass after glass of wine. You may think you will remember the name of a fantastic Sauvignon blanc, but following a day of spitting a dozen different wines, you’ll struggle to recall what wine it was that was going to make your fortune.

If you are more tech savvy, drop the paper and pen and use your phone. Most come with note taking apps and can help you keep track. Some even sync straight with a database so you can access your notes anywhere or even send notes to a investment partner should you need to.

Prepare for the long game

Wine investment generally produces positive returns every five years or so, so prepare to maximise your returns with a medium to long-term strategy. This is because when wines mature they improve and become rarer and more desirable, driving prices even higher.

By investing in this way you will avoid any short-term fluctuations and benefit from the remarkably consistent and low-volatile returns of around five to seven percent afforded by wine investment.

 

Daniel Elswood is a wine specialist and auctioneer at Catawiki

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