• Direct investment in a vineyard: You can do this either by partnering with an established vineyard or by starting your own. In any case, it’s a long-term investment, one that requires a great deal of expertise and operational know-how.
• A wine portfolio management service: In this option, a specialist portfolio manager will devise an investment strategy and select wines accordingly, make arrangements for storage of the wine and advise you 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. 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 takes your wine to market for you.
Assessing The Risks
In any investment, it’s crucial to understand the risks. When you invest in wine, those risks are:
• 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 keep its value, wine must be properly stored, either by the investor or by 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.