Wine investing is exactly what it sounds like, it’s investing in wine. But, the finer details of this type of investing and what it entails can be a bit more complicated. Interested in Wine Investing Cambridge? Investing in wine involves buying bottles of wine that have the potential to gain in value over time.
The fine wine market focuses on vintages that show investment potential, which means it is considered long-lasting, rare, and in-demand. You’re not going to be a successful wine investor if you head down to the local grocery store and purchase a few bottles of mass-produced wine for £7!
In the past, vintages produced in the regions of Bordeaux and Burgundy in France dominated the fine wine investing market. However, today, it is also worth investing in wines from all over the world.
In fact, according to Liv-Ex (London International Vintners Exchange), in the last five years, wines produced in Italy and the United States have become some of the most popular investment wines, with many regions producing investment-grade wine with the potential to increase in value over time.
Cambridge fine wine investments are attractive to those who feel that the Cambridge wine market offers a promising future. Younger and younger investors are looking to wine investing as a way to diversify their portfolio – the average buyer at a wine auction is currently in their 40s (previously, the average age was around 60). More people are interested in buying and drinking fine wine, which could offer opportunities for those looking to make money off a growing market.
Additionally, wine investing and finding the best wine investments can be attractive to someone who simply loves wine and wants to add it to their investment portfolio as an alternative asset.
It’s important to note that, in many cases, wine is considered a long-term investment and lacks the liquidity of other investments that can quickly be turned back into cash. You can expect to hold your Cambridge wine investments for at least three years before you begin to see better results.
Wine investing offers profitable potential returns – over the last 15 years, wine has offered annualized returns of 13.6%. Cambridge wine investing is considered less volatile than real estate investing.
The quality and scarcity of fine wine appreciates over time – and so does its value. This is the underlying principle of investing in wine.
Even though you physically own the bottles of wine you bought it is recommended that you store them professionally in specialised facilities until you sell them. This way your valuable wines are safe and in perfect condition until you wish to turn a profit. As a wine investment company, we will buy, store and sell your wines for you, without you having to take on any of the headaches of having to build your own wine cellar.
Investing in fine wine is both enjoyable and very rewarding, providing the opportunity to explore, understand and own some of the finest luxury products in the world. Fine wine’s historical performance has led many investors to view it as a tangible, alternative asset that can be used to diversify an investment portfolio, delivering stability and growth that can de-risk an investment strategy and protect wealth.
The global influence of the Bordeaux region in the fine wine investment market remains unsurpassed, with the top properties contributing near £2bn annually. Wine has been traded in the region since the 12th century and the high grade investment wine produced here today remains the cornerstone of the industry. Bordeaux Wines currently account for around 80% of fine wine traded worldwide.
The best Bordeaux wines continue to dominate fine wine auctions and their names, with their noble lineages and international cachet remain essential currency for anyone involved in investing in wine.
The Liv-ex 50 index, which tracks the last ten vintages of the five First Growth wines (Lafite Rothschild, Mouton Rothschild, Latour, Margaux & Haut Brion) has increased by nearly 300% since its inception in 2000. The Liv-ex 50 index is the industry benchmark and is what many financial institutions will use to monitor the performance of fine wine. Although this view of the index can quite often dictate the global opinion of the market, it is important to understand that this is a snapshot of the overall market. With the market broadening now more than ever, diversification across more than just these five wines is imperative.
Bordeaux is a magical place; it has it all! The terroir, history and talent, the grapes, the popularity and the prestige. And although competition is fierce in today’s wine world, there’s always room for the classics, and few wine regions are as classic as Bordeaux.
What makes Bordeaux wine so popular? For red, white and even sweet wine, Bordeaux is just a classic wine style with history and tradition, and quality is a given. Just like we love classic cars and old movies, there’s something Bordeaux has that other regions don’t — Bordeaux is timeless.
While wines from all over Italy are traded in the secondary market, the two most important regions are Piedmont and Tuscany. Piedmont (in the north of the country) and Tuscany (in the centre) contribute to a healthy overall market in complementary ways. The top price performers come from the north. These are principally made from the indigenous Nebbiolo grape.
But Italy’s steadily rising market share has been driven by trade in the Super Tuscans. These are typically made in much larger volumes and tend to include, or be made entirely of, the international varieties Cabernet Sauvignon and/or Merlot. This, combined with their brand strength and critical acclaim, has put Italy firmly on the international fine wine map.
Compared to the broader market, prices for Italian wines have been rising at a steady pace, experiencing minimal volatility. The Italy 100 is up 209% since its inception in 2003.
Fine wines which are viewed as investment-grade are of an extremely high quality, recognised by the world’s leading critics, produced under strict conditions by the best wine producers and, importantly, the demand for these wines supports an active secondary market which drives prices to very significant levels. Value is enhanced with rarity and excellent provenance – by this we mean an audit trail of ownership which guarantees the wine has been stored in perfect conditions to maintain the excellent quality of the wine.
Fine wine has an inherent, physical value, unlike stocks and shares. The value of fine wines increased by 13 per cent in the year to the end of June, in contrast to art sales, which slumped as auction houses remained closed.
Research by Wine Owners, an analytics company, commissioned by the estate agency Knight Frank, showed wine had experienced a sudden appreciation in value during the pandemic.
Sales of Bordeaux, particularly vintages from 1996 and 2000, had rocketed because they could be consumed on the spot or collected and stored by affluent drinkers.