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Diversifying your investment portfolio with wine

It is my considered opinion that investing in wine should only be pursued if you have a passion for wine and enjoy sharing it with family and friends. Much like art, and the fact that art appeals to a variety of sectors each possessing widely differing tastes, inclinations, and personalities, wine itself is similarly varied and for the most part, what you will find wonderful about the wine you choose to appreciate is for the most part subjective. wine returnsThis is a fact that can make it difficult for wine investors to forecast a return on their investment. So the best advice is to learn what you like and why you like it, then to invest in what you like, whether your inclination is to favor a rich and bold Cabernet Sauvignon, or a sophisticated and intriguing Pinot Noir. In other words, the principle to put into play at the very beginning of your wine investment journey is to invest in wine that you would not mind drinking yourself. 

If you are serious about wine investing for profit, then educate yourself! Do your own research and then share your observations and opinions with other wine investors and wine appraisers. Be goal specific:wine investment-471071 What are you trying to achieve? What kind of return on your investment do you hope to achieve? Large and long-term? Or modest and short-term?Some say that if you are looking for a large return on your investment in wine then you should give serious consideration to purchasing well-known vintages that have received high scores from wine critics. Tip: When it comes to “wine-scoring,” the famed Robert Parker has been the go-to expert for more than 30 years. Investment-grade wine can be seen as a commodity that has a reasonable chance of appreciating in value over the medium-to long-termtypically at least five years. Scores above 95 are considered investment grade but you’ll soon come to see that the greatest appreciation in value occurs for wines that have achieved a perfect score of 100. 

Wine provenance, storage, tax, costs of acquisition and re-sale are all factors that need to be considered and planned for in advance in order to obtain the wine investor’s ultimate goal. Only 1% of wine production makes the cut for investment quality wine. Even at 1% that number is large. Every year over 34 billion bottles of wine are produced! Thus there are over 300 million bottles of wine that would make the investment grade cut. wineinvesting

Like other alternative assets, wine is only worth what someone is willing to pay to acquire it.  Renowned critics can influence the value of the wine investment. A poor review and subsequent reduced scoring can cause the price of that vintage to plummet. The five-year appreciation with respect to the year 2000 vintage (since release) provides an example of the gains that can be realized with other good vintages.

If you are interested in learning more about wine investing, simply contact us and send us your question. We will do our best to respond. 

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What’s more Fun?!?!?

 

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What’s more fun, investing in more tech stock or investing in luscious wine.... easy answer.... WINE!!! wine bullThe alluring prospect of physically tasting one’s investment just about outweighs most anything for me. Here is a key thing to think about…. the available quantity of fine wines continues to shrink day by day, and as history has revealed, in a weak or strong economy, people will continue to drink!

Fine wine is an art, a delicious, consumable, piece of art. A work of art that is worthy of enjoyment by your intimate friends and yourself. Or perhaps wine is a work of art that is worthy of cashing in for a sizable monetary investment gain.

If what you are looking for is wine as a tradable commodity, then what type of collector are you? How do you go about collecting? How do you begin? Here is where the practical collector meets the technical collector.

Practical Casual Collector ⎯bigstock-Coins-In-A-Wine-Glass-9866161 these are the collectors who learn about wine through friends, through weekend trips to various wine countries, and then, as years pass, realize that they love wine; the palate has matured and one’s enjoyment has therefore become more refined. The majority of collectors are practical, casual collectors ⎯ fantastic! But where does one go from here?Understanding the class of wines is of foremost importance, so here come the “IGWs,” defined as investment grade wines. The best place to start is by honing in on what type of wines are investment grade wines. Hint: Bordeauxs and California cult wines are the most in-demand wines for financial return.

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Wine cellars are an investment, not a necessity.

Wine Cellars are an investment in the future, and they’re currently being used as an accessory.

A lot of people who start drinking wine and have the opportunity to design or remodel their houses decide to add a wine cellar. However, so few of those people will actually get any added value (aside from the higher realty value) out of the addition. How many wine cellar owners are getting real use out of their wine cellars, and what are the circumstances in which building one would be a good investment?

A wine cellar has to meet certain specifications to be effective at storing and properly aging your wine. It must be temperature controlled to be 65 degrees (F) or under (most wine professionals recommend keeping red wine between 50 and 65 degrees and white wine between 40 and 55 degrees). It must be dim or dark to prevent UV damage to the wine. It must have humidity control to prevent the corks from rotting or drying out. It must have racks that will keep the bottles sideways and the corks expanded and wet. And those racks must keep the wine bottles visible, organized, and in pristine condition—ripped or marked-up labels hurt the resale value of the wine, if the owner plans on cashing in on his investment.

In order to make the wine cellar worth the price of construction, the owner should have a few goals:

1.       Buy wine that you plan on aging, and buy it in bulk. If you dedicate space in your house to a wine collection, it should be a wine collection that you don’t plan on removing the next day—you want to let the wine rest and age without disturbance, especially if you’re saving the bottles for a special occasion or resale. A wine cellar is not ideal for everyday-drinking wines. The setup and price of such a room is expensive and unnecessary if the bottles you own are going to go in and come right back out.

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Sir, May I have a drop of wine, maybe two, possibly three, please?

Greetings my fellow Oenophiles, I must admit my curiosity was piqued when I heard about the "mystical exlir" designated as: 2004 Kalimna Block 42 Cabernet Sauvignon.  The distinctive bottle called an Ampoule looks like some science fiction weaponry from the movies "BLADE" or " THE UNDERWORLD" of vampire genre lore.

Penfolds Ampoule I have never visited Penfolds. I have tried some of their offerings in the past.  Unfortunately, at the time I tried them, my inner oenophile was asleep so I have no clear recollection of my Penfolds tasting experience. However, the $168,000.00 Aussie dollar price tag of this "Wine Art" certainly caught my attention. Although, I believe the people at Penfold's should raise the price to $186,000 to correspond to the speed of light. 

Currently, I have not the budgetary means to personally enjoy this Penfold's largesse. So, I decided to discover what the cost per drop was of this wine. I discovered that a 750 ml bottle contains approximately 15,000 drops of wine.  Thus this "little beauty" will cost $11.20 per drop on a cold day.

I imagine myself dinning out with friends enjoying a sumptuous steak dinner with all of its accoutrements. The sommelier dressed in their most formal attire complete with white gloves waits patiently for all of us to tilt our heads upwards with longing eyes to recieve the perfectly placed drop of wine on our extended tongues.  "Oh joy" is this the future, wine by the drop? I applaud Penfolds, a upscale winery from the "Land Down Under" in their ability to create such a great PR campaign.  They have created a delicious paradox for these times. Do I celebrate their marketing and vision? Or do I frown?  I only hope that Penfold's commits itself to philanthropic endeavors that relieve the suffering of the hungry.

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Rebecca Barbee
$11.20 a drop is a bargain - I would be up for paying at least double that for the bragging rights!
Saturday, 21 July 2012 11:11 PM
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