TAKE A PORTFOLIO APPROACH
Wine’s still considered a pretty high-risk investment, but the returns in the long run can be pretty impressive (as long as you don’t drink your cellar dry in the meantime). Experts have compared the performance of the FTSE 100 to the Wine Owners 150 benchmark index, and found that over the last seven years, wine has performed really quite well (the WO-150 delivered a 119% increase over the period, while the blue-chip index returned 7.59%). As with a lot of ventures, building a diversified portfolio is key. In other words, spread your bets – don’t treat it as one homogenised market. The core of your brand spanking new portfolio should be Bordeaux and Burgundy, possibly with a few top-level Italians thrown in for good measure.
BEWARE OF COLD CALLERS
Don’t buy wine from cold-callers – at least not unless you know them, or you’re satisfied that they’re reputable and the prices of their ‘picks’ are competitive. Most often these calls will come from people calling themselves 'wine investment companies', most of whom wouldn't qualify as sophisticated investors if they were operating in a regulated market – in fact they’d probably be accused of mis-selling. In other words, if you get a call out of the blue from a ‘wine investor’, they’re probably shady and to be avoided.
BUY IN BOND
London’s the centre for fine wine trading. The market here is truly global, and buyers can come from everywhere, spanning Asia, the Americas, Europe and parts of Africa, too. Storing fine wine in bond (i.e. in a secure, authorised warehouse) means not paying VAT and duty, which, unsurprisingly, makes it a lot more attractive to a global audience. It also tells the buyer that the wine’s been professionally stored its whole life – making sure of its provenance and making it more desirable by the time you decide to sell it on.
By Nick Martin, founder of Wine Owners. If you want helping setting up and keeping on top of a fine wine portfolio, see wineowners.com
