Investing in Wine

Financial Adviser's picture

When it comes to investments, the first step is always difficult to make but once made the second foot becomes lighter. To begin, you need to have a great grasp of what you are going to be dealing with. There are many wine products in today’s market; a knowledge base of modern and popular wine is more than important in making the right choice in the dynamic investment. Not all wines are great for investments.There are many regions that are reputable and famous in wine production like European countries. This knowledge will equip you with skills to be intrepid in the market.Skills of knowing the right time for getting the wine as the auction cycles pass are useful. It also helps to know the different grade and growth possibilities.

Did you know that different wines mature differently? Some mature quicker than others. Experience is the drill here: If you think you are not ready to dip yourself in the venture, consider meeting an expert who will talk to you on all the market information you need at your fingertips. The right time will always be there, so take your time to learn the tricks that at the end will make you bold, aggressive, and above all an expert in what you do.
 
It is a good endeavour to start investing high. For instance, you can decide to kick start with popular wine category like the Bordeaux just to raise your confidence. The French Bordeaux wine is famous for the quality in it. There are a plethora of these wines and choosing the right one for a greater future will worth your time and risk. A risk comes always in any great investment. For this brand it come with a high price tag which means you will need to have a lion’s heart when purchasing it and remain with the hope that the future will be brighter.
 
Apart from the French wine, the Italian wines are also a great choice to kick start your quest.  You can decide on the particular one that you think will be a definite win. This will be based on the research that you have carried enlisting all the benefits that the different brands are bound to bring. Furthermore, there is no limitation, your capital will do the talking; if you think you are good at risking then investing in both French and Italian wines will prove the extent that you can go in risk spreading.
 
It is also advised, that you be attentive to upcoming wineries that can be the next big thing. For instance, Australian wine have recently showed some great progress in producing quality wine. This is one of the secrets that you are lucky to be hearing, Investing in such markets can be a mind blowing idea that can turn you into something you have never thought you would ever become. With the ever-widening international market for Australian wine, the locals market has been the target for wine from Asia and the USA. This is because most of the Australian wines are exported, leaving none for the locals. A closer look at the Australian market will prove to be a potential investment opportunity for the future to come.  It may be the greatest cutting edge decision that you will be happy to have made. If you think the nail is being hit on the head, then further ahead is a study on Australian wine ventures with how you can get your hands on the prospect.
 
How to invest in wine shares
 
Wine shares involve taking fair share of different grades of wine. Venturing in diverse shares is the way to go whether in Italy, France, California, Spain or Australia. Make sure you’ve tried your luck all round as you never know what the wine stock market requirements are. This practice is important just in case a particular stock depreciates in value. You will be free to save your pleas for another day because the rest will provide a cover. A good look at the Australian wine business will provide notch on how to invest in wine shares from a practical perspective.
 
Today, Australia stands proud with five great wine giants in its heart. These companies are responsible for processing up to 936, 120 tonnes of grapes in 2003. This produce equates to 69% of the entire crop in the Australian vintage land expanse. Below is an assessment of the five companies and the reputation they have.
 
The Hardy Wine Company owned by Constellation Brands Inc. is the greatest producer which is always standing out in the New York Stock Exchange. It is followed secondly by Southcorp Wines Ltd which is a great competitor listed in the Australia Stock Exchange (ASX). Third in the list comes Orlando Wyndham followed fourthly by McGuigan Simeon Wines also in the Australian Stock Exchange. Final on the list is Beringer Blass Wine Estate, a branch of Foster Group (ASX). Other small public producers include Evans & Tate, Xanadu, Peter Lehmann and Lion Nathan Group.
 
This new industry can be an investor’s greatest target,but this shouldn’t lure you to always place your priority on this.There are also a number of other global industries that will definitely be of interest to your too.
 
With the strong for survival concept, it has now become a common arena that global distribution wine channels are increasing in size as other get out of market. The wine industry especially the Australian companies are facing a lot of pressure in keeping their share prices on top of the curve. Large wine producers are the controllers of large brands, which have seen them, sell their products to large-scale distributors and giant retailers.
 
To be minimum on specifics, this giant wine investors still are and remain to be the heart of the world wine trade, so engaging in wine shares has an assurance that your shares will always shoot up. The table below shows some high street names in the Stock market that form the ruling class.
 
Table 1.1 High end wine investment names and their specific codes
 
Name
ASX Codes
Australian Wine Holdings
AWL
Constellation Wines
CBR
Dromana Estate
DMY
Evans & Tate Ltd
ETW
International Wine Investment Fund
IWI
Lion Nathan Ltd
LNN
McGuigan Simeon Ltd
MGW
Simon Gilbert Wines Ltd
SGV
Southcorp Ltd
SRP
Xanandu Wines Ltd
XAN
 
Investing in Physical wine
 
Investing in physical wine won’t require you to be a rocket scientist, and it doesn’t have to make you tired. When you incept sure ways of cellar maintenance then the process will definitely be a spread of butter on bread. Do you have from hundreds to thousands of wine bottles and you are thinking they may all spoil before time comes? Then you better start applying expert advice that will assure your investment is long living.
 
Just like a library is organized in manageable aisles, so also you need to apply the same technique. Whether your cellar is large or small, documentation is equally important. Investing in physical wine is an easy process; you will keep on reading in order to justify this thought.
 
Physical wine documentation is done by the use of computer software. Unlike the manual way, computer software can manage wine placement in your cellar. There is an array of software programs flocking in the market of which are especially encoded for full cellar functionality. Such examples include the Uncorked Cellar, WineBanq, and Cellartracker. You can give it a try by use of their trial version before deciding whether it works for your taste. Other alternatives for this may be through the use of simple spreadsheet application like excel. Remember that no matter how advanced the program at hand is; what is important is a detailed follow up record of every single wine in the cellar vicinity. It is also trendy that the records are printed and stored in a lockable safe. These records are important in providing the history of your collection when the date of resale comes.
 
Wine investment essentials
As the global demand for fine wine crops up with evidence of it outperforming the FTSE and Dow Jones, it is high time for investors feel the rain on their skin by learning a few essentials that needs be at the top of the procedure.
 
You need to focus on telling top notch wine from top vintage. Not all wines will increase in value when kept. Also, the wine should be stored correctly; you know the drill if you’ve been reading. Third, buy and store wines ‘under bond’ so that sales taxes won’t apply. Lastly, you need not avoid expert advice; take it from experienced importers and retailers, more so learn the terms because when you go to Rome you will definitely do what Romans do. Some of the terms include:
 
Wine futures – What comes in your mind when you think of wine is some fancy bottle with a shiny gold label, right? When it comes to wine futures it means no bottle, this is wine just before it is drained in bottles. It is also referred to as En Primeur – meaning purchasing of wine just after being made. This is a term familiar to wise investors, journalist, and collectors. It is a down to earth opportunity that opens the doors to greater profits as one can purchase the wine at a discounted price which will be resold at a higher market value after appreciation, not to mention the serene opportunity of tasting wine for free! “I thought free commodities perished in the forgotten world!” not with wine futures.
 
Wine scores – this is a universally known term. They are scores that are individually applied to wines. This way, it allows investors to establish their stand, not forgetting the chance placed for an individual to select the wine just to enjoy. It further helps open up the wine market all over the world so that all and sundry investors get a chance to invest. You shouldn’t confuse this with wine prices.
 
Wine prices – this gives the investors bargaining power. Wine price fluctuations are responsible for selecting grade wines. This price fluctuation open up an opportunity to investors to grab those wines that are undervalued thus increasing their future profits by an inch.
 
Once you have these terms under the hood, then you will be on your way to start purchasing different shares. Also consider backing up your game on other concerns such as wine insurance, fill level, correct wine storage, wine evaluation, fine wines and any other terms.