WINE INVESTING

Wine as an Investment

Wine investing can be an expensive venture. There is a lot of information surrounding this subject that can make it complicated. I will only scratch the surface since I like to keep it simple and easy, and wine investing is more than simple.

Is is prudent to know that there are stringent laws in many states regarding buying and selling alcoholic beverages which can make selling a wine collection difficult or almost impossible.

With that said, I'll simply move along.

Very old bottles of wine are very valuable. Many people think this statement is a given.

If you really think about it -- what makes this particular old bottle of wine so very expensive while another old bottle of wine, that may be equal in quality, be so much less?

Who is to say that one old bottle is worth a lot more money than the next?

Supply and Demand

Supply and demand also play a role in this. Price often determines the quality of a bottle, however when there are very few bottles available, this can also increase the price of the bottle.

However, price may or may not be a good way to determine the quality of the wine. One example of this is with the New World wines where the prices are high because productions are usually very low.

Or there are the wines that are suddenly the new "hot" wine and everyone wants to buy a bottle. Those wines usually get a lot of advertising but may not necessarily be the high quality to deserve the high price tag.

This puts that wine into the category of World Class wines. This is a good example that money does not guarantee quality. Yet these popular new "IT" wines sell very well.

High advertising costs and promoting a product can also add to the big price tag. A winery's facilities and production costs can also add to the higher priced wine. All this just makes the wine overpriced if the wine is of poor quality.

So, how do you know if the wine is really worth it for wine investing ? Having a good amount of knowledge, a well trained palate, and a basic instinct to know the good from the bad wines and producers. Don't buy to invest just because a bottle is expensive. Do your research before you make any decisions.

Auctions

The so-called "investment" wine auctions are held by large and well-know auction houses. Serious wine collectors and appraisers are well versed in the results of the auctions. If you are at this stage in your wine collecting and investing I have no doubt you have all the knowledge and confidence to make wise investments.

Futures

A common way to invest is in Futures. Futures is usually buying Bordeaux before it is bottled. There is a lot of speculation surrounding this investment. And there is no guarantee that the yields and quality of a particular vintage will be spectacular.

There must be a fairly decent demand for the wine, and the fluctuating currency plays an important part in this as well. Many times the demand for the wine is low with the currency fluctuating on the high side. This combination makes the wine's value less than your original cost.

There is also the possibility that the vintage, though experts claim that it is to be great, produces a wine that does not meet the expectations and is declared a mediocre wine. Of course the price you paid is now much more than what the actual wine is worth.

As you can see, collecting wine as an investment may not always be a World Class investment. However collecting wine for your personal enjoyment is certainly worth it if you enjoy wine.

So Taste Wine and Enjoy! it with family and friends.

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