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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 Medals, Ratings and Reviews and How..

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Ratings, wine competition medals, and wine reviews can be important reference points that can influence people to select and buy one wine over another. If these ratings, award medals and reviews are unbiased and fair, these “persuaders” can serve as a good indicators of what the wine lover might experience when drinking the wine that was rated and reviewed.WIne-Rating-250X194 Additionally, These “reference points” also help establish the economic value of the selected vintage.  

But all of this begs a question: Are current ways of reviewing, rating and awarding medals an absolutely unbiased and fair way of doing what they are supposed to do? Or are they simply a manifestation of the personal taste and subjective opinions of those who care enough to write up their reviews? Are the medals assigned to a wine by esteemed wine-tasting judges and experts awarded according to consistent standards or can it be said that they are awarded rather randomly?

I think it is important for me to acknowledge that as far as I am concerned, wines fall into two main categories: First, there are the wines that I want to enjoy. The wine does not have to be a medal winner, it just has to please my palate and pair well with the particular dish I am eating. Second, there are wines that I might regard as an investment: Wines that I think will appreciate in economic value, or wines with such hefty price tags that I have to wonder how they will appeal to my palate. Will they really offer exceptional aroma, superior taste, greater pleasure?which wine should i choose In an earlier article I wrote about Penfolds' $108,000 offering:  http://www.signaturewines.com/blogger/sir-may-i-have-a-drop-of-wine-maybe-two-possibly-three-please. What signatures did this wine possess that rendered it worthy of such an exalted price? 

I have a great many friends and acquaintances whose knowledge and experience far exceeds my own and who regularly serve as wine judges and wine critics. So I’d like to ask them this question: How do ratings, wine competition medals and wine reviews impact the value of wine? Can these correlations be standardized or explained empirically? 

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Understanding Wine Ratings Part 2

OD-AV904 WINE P G 20130301123200At its best, the art and science of wine blend together and become a compound inseparable from each other, and thus, like art, wine at times often transcends our ability to measure its quality empirically. Sometime ago I wrote an article called “The rating of wine … where does one begin?” http://www.signaturewines.com/blogger/the-rating-of-wine-where-does-one-begin

This article, now almost two years old, has been visited over 178,000 times. It seems clear to me that the topic of wine ratings, and understanding the power and influence they possess, underscores many of our biases, desires and behaviors when it comes to selecting, purchasing, collecting, investing and even choosing which wine to imbibe.   

In my previous article I describe the 20 point scale that intends to offer an empirical process for applying a measurement scale to the qualities of wine. I also promised to visit and write about the 100 point scale utilized and made popular by wine critic Robert Parker Jr. My intention here is to briefly discuss the 100 point wine scale with the goal of expanding upon my opinions rather than presenting some kind of thesis on this matter.wine-ratings-good-bad Needless to say, wine ratings are important and do have measurable effects on the economics of a wine. wine-ratings1

In the late 1970’s a relatively unknown attorney in Maryland fell in love and traveled to Alsace, France to pursue his future wife. In the late 1970’s, Mr. Parker began chronicling his wine tasting musings and critiques and conceived of producing a resource for wine enthusiasts, which is now called erobertparker.com (formerly known as The Wine Advocate). Mr. Parker along with his friend Victor Morgenroth popularized a 100 point rating system.

This rating system gained rapid popularity and clout because it parroted the academic scales (A, B, C etc.) that practically everyone can readily identify with. Thus the application of a 100-point system promoted the natural belief that 90 points and higher meant quality. To me it means “A” grade. And who doesn’t want to enjoy an A grade wine?

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