• A wine portfolio management service. A specialized portfolio manager will devise an investment strategy and select wines accordingly, make arrangements for storage of the wine, and advise on when to sell to capture optimal returns. This can be a tax-efficient way to diversify your portfolio, as you don’t pay taxes unless and until you take personal delivery of the wine. Of course, you should consult with a tax advisor to discuss the tax implications of this (and any new) investment.
How To Choose Wines For Investment
France—specifically the Bordeaux and Burgundy regions—produces the majority of high-demand wine for investment purposes. A smaller amount of investable wine comes from Italy and California.
Many investors prefer to hire a professional wine manager to help recommend and facilitate their purchases. Because this is an ever-changing marketplace, it requires a great deal of specialized knowledge to separate the best investment opportunities from the rest of the market.
Ultimately, the person advising you will also likely be the one who will take the wine you own to market for you.
Assessing The Risks
As with any investment, it's crucial to understand the risks of investing in wine, which could include:
• Market unpredictability. Market demand for specific wines may ebb and flow. The process of choosing wines as an investment involves a degree of speculation about the future demand for any vintage in which you invest.
• Storage. To maintain its value, wine must be properly stored, either by the investor or in a professional wine storage facility. If you store wine on your own, you may want to look into adding a rider on your property insurance to protect it.
• Fees. As noted above, you'll likely have to hire a wine manager to help you purchase, store and sell the wine you’ve chosen to invest in. This service comes with fees, often in the range of 15 to 20 percent.