What you should know about wine investment

The alternative investments, including wine
investment have been steadily gaining popularity in the recent years, and shown
great results. However, simply buying good wine cannot be considered an investment,
and in fact, only a small number of the top fine wines have shown steady
returns. Knowing what to buy and when to buy it is crucial for the success of
any investment, but the wine investment segment of the market has its own
specifics.

The stock and Forex markets are largely
regulated and anyone, who wants to become a broker in these traditional markets,
has to show substantial capital and expertise. Wine investment, on the other
hand, is not regulated in most countries, which results in great number of
companies and individuals exploiting its rising popularity. This, in turn, has led
to some poor practices and swindles that can hurt the inexperienced investors. Companies
and brokers, who charge upfront commissions and fly-by-nigh operators,
promising double and even triple digit returns have been working in this market
and caused investors losses in excess of £100 million annually.

As an individual investor, you should
always take the time to research the wine investment company, fund, or
consultant that you are dealing with and seek an independent professional
advice when making significant investment. Buying en primeur, which is what
most investors consider the most profitable, is also one of the riskiest ways
to invest in fine wine. In such cases, the investor would have to wait 12, 18 or
24 months before receiving the bottled wine, which could see even legit and reputable
companies go under, leaving the investor empty-handed.

However, not all is doom and gloom and fine wine
investment, when done smart and right, could deliver on its promise. The
expectations of almost all wine traders and merchants are that this year will
be strong and the prices of Bordeaux will continue to rise. Of course, this
largely depends on the sustainability of the higher demand for fine wines
mainly in China and the Asian market as a whole, but the expectations, shared
by most, are that the main wine index with rise by approximately 21%, which
should satisfy most investors. Last year’s hike of 41% and 11 strong months
with just a small dip in July has made wine investment one of the best
performers, and the prediction of stronger Chinese currency, is also a
promising factor that should result in good returns in the coming months as
well.

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