Why Invest in Wine?

Fine Wine Investments have a proven track record for over 50 years. Investment Grade wines have regularly outperformed both traditional and other alternative investment classes with annual returns estimated at 12-18%+ per annum. At the same time wine prices have shown lower volatility and susceptibility to recessions than equities.

Returns have especially escalated when the new demand from wealthy Chinese (Indians, Russians) exploded beginning in 2005. The famed First Growths of Bordeaux (Lafite, Latour, Mouton, Margaux, Haut Brion, + Petrus, Yquem, Ausone, Cheval Blanc) from the best vintages such as 1982, 1990 and 2000 have appreciated as much as 200 -600+% in the past 4 years alone.

Wine Investment in simple terms has worked because of basic economics:

The drinking quality of properly stored fine wine improves with age, while the finite supply simultaneously decreases from consumption.

More people want to drink a wine when it is mature, but there are less bottles available creating an increase in price. In principle Wine Investors of the past could simply buy a couple cases of great Bordeaux such as Chateau Lafite Rothschild on release of a good vintage, store them for 8-10 years and then sell the wine at auction for a tidy profit to pay for more wine. The keys to success involved buying the highest quality wine at the lowest price, store it properly and sell at the right time for the highest net return.

Unfortunately in the real world of today’s speculative market, investing in wine is no longer a simple proposition. Knowing which wines to invest in, at what time, for what price and most importantly knowing how to sell to maximize returns, requires professional experience and assistance. The mystery and lack of transparency surrounding the wine industry and multiple layers of pricing from Ex Chateau/ Producer, Courtier, Negociant, En Premier, Importer, Broker, Wholesale, Retail and Auction further complicate the process of buying and selling that now requires a detailed roadmap. Wine-i was established with the goal to becoming the leading Wine Investment advisor in Asia.

10 Reasons to Invest in Fine Wine

• History of returns outperforms equity and commodity markets over 25- 50 years – 12%-18%+ annualized.
• Low volatility compared to other assets.
• Traded Physical Asset – hedge against inflation.
• Low initial cost in small units (cases / bottles). Can be sold off in parts.
• Supply of finite production decreases over time while quality increases.
• Growth of collecting and consumption from Asia, Russia, India and Brazil from new status conscious millionaires.
• Increased demand from wine funds, banks and investors.
• Transportable from areas of low demand to high demand.
• Inefficient market with pricing tiers creates arbitrage opportunity.
• Enjoyment – Drink profits, build relationships, travel and study the craft and history of wine.

The 10 Keys to Wine Investment Success

• Buy only the best Investment Grade Wines.
• Develop a properly diversified wine portfolio.
• Buy at the lowest price.
• Buy at the right timing.
• Buy only the best condition and provenance wines.
• Store and insure in professional bonded storage.
• Control title and access to inspect, drink or sell wine at any time.
• Sell at the right timing.
• Sell for the highest net price.
• Reinvest and manage portfolio for maximum annualized returns.

10 Common Mistakes of Wine Investing

• Buying wines that are not Investment Grade.
• Having the wrong wine portfolio diversification (Not weighted to regional demand).
• Buying wine at retailers even at discounted retail price.
• Buying at the wrong time (including En Premier).
• Investing without having physical control of wine.
• Not using professional, bonded storage and insurance to protect wines.
• Buying from unknown suppliers or investment companies lacking knowledge and transparency.
• Investing without an exit strategy.
• Not being able to sell because of lock in period or redemption penalty.
• Selling too low net of all costs (ex: auctions).

5 Wine Investment Myths and Truths

• Myth: Wine investment is risky speculation.
  Truth: Investing in the best wines from the best vintages has proven over 40 years to be a safe and stable long term investment with less volatility than other asset classes.
• Myth: Investment wines are recession proof and not correlated to other markets.
  Truth: Since 1995 wine values increased at faster rates during economic expansion and rising equity markets and flatten or recede during recessions. Because wealthy buyers will always be chasing a decreasing supply of Investment Grade wines prices have held better than with other assets during downturns
• Myth: Buying En Premeur is the best way to Invest.
  Truth: While buying En Premeur can allow investors to see immediate gains of 25% - 200% on release of the highest demand wines from the greatest vintages , the strategy can more often lead to losses or tied up capital that could be used for greater returns.
• Myth: Only buy Investment wines from Bordeaux and store in Bordeaux for best returns.
  Truth: Bordeaux wines should make up 65-75% of a balanced portfolio. Wine direct from the producer (Ex Chateau) that are stored in Bordeaux can assure provenance and some premium at auction. However the premium has become smaller in recent years and the higher purchase prices far outweigh the benefit. Wines from any reliable source worldwide that are properly shipped and stored with verified record keeping can be sold in Asia for often equal if not greater value than French sourced wines without direct Chateau History.
• Myth: Wine investment requires patience, wine knowledge, technical and fundamental analysis, great suppliers, and exit strategies, but can be extremely rewarding financial and personally.
  Truth: Very true and Wine-i is your partner to help you achieve your goals.

Register for Investment Talks

Sample topics:

• How to spot a Ponzi style wine investment scheme and what to do if you think you are caught in one.
• What you should know about wine investment before you start.