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Sunday, January 03, 2016

Building a wine collection - Savvy wine investing


How should one go about being a savvy investor in wine? This is a question many people ask themselves when looking into filling a new wine cellar that they have built or inherited with the purchase of a new house. When faced with this question of how to make the right choices to build value in your wine cellar, there are a few things to consider.

First, what is your purpose of building a wine collection? Do you plan on drinking this wine and investing in wine for the purpose of eventual consumption? Or do you plan on building a collection that with appreciate in value over time and become an asset to one day be sold off at auction? Perhaps, you'd like to do a little of both........

Where to start?

When starting any collection you want to consider purchasing items that are blue chips and things that have a great track record of maintained value over the long run. The Microsofts, Intels, and Apples of the stock market certainly draw comparisons with the great wines of Bordeaux in the wine trade. So I would suggest starting your collection of with classified "growth" Bordeaux from good to great vintages.

How to know what a good vintage is?

This is a very important question to resolve before starting to purchase. The great thing is there are so many easily accessible vintage quality charts out there to help guide you to quality vintages in every wine region in the world. To access this information it's as easy as opening up Google and typing "wine vintage chart" in the search bar. Make sure look up Wine Spectator and Robert Parker's Wine Advocate vintage charts, as these are the most highly respected wine critic's and they drive a lot of pricing when it comes to fine wines.

What other wines to invest in besides Bordeaux

Once you have started your collection with a good variety of quality growths from Bordeaux, you'll want to focus your efforts on investing in other blue chips.

- High scoring California Cabernet

- Quality Italian wines from Barolo, Barbaresco, and the Brunello and Super Tuscan wines from Tuscany

- Grand Cru and Premier Cru red Burgundy from good vintages

- Vintage Port from top houses

- Tete de Cuvee Champagne (Dom Perignon, Louis Roederer Cristal, Salon, Krug, ect)

- 98-100 point scoring wines from Parker, Wine Spectator, Wine Enthusiast.

How long must you hold the wine?

This obviously depends highly upon your objective. If you're in the game to make money you'd want to keep the wines until the market segment of each region is peaking in terms of auction prices. Certain regions will be popular at different times depending on the press and their depiction of quality vintages or certain large economy's like China gaining a thirst for a certain region's wine.

If you're wanting to hold the wine and drink it when it's peaking in quality, I would suggest getting on cellar tracker and reading what people are saying in their tasting notes as they begin to open these bottles. Also you can read critic's reviews as to when they think these wines will reach their optimal drinking window. The most accurate way however is to buy a few bottles of each wine that you collect and open them periodically and make your own assessment as to how the wines are coming along.

How to liquidate your collection?

In the event you want to liquidate your wine collection or at least certain lots in your collection you'll need to find a quality auction website where you can sell the wine direct to collectors or if you want something extremely secure because of the higher value of your lot, you'll have to consign the bottles to a auction house and pay a somewhat higher commission. Some of the online sites to consider for auctioning directly to the buyer are winecommune.com and winebid.com. Christie's, Zachy's, Sotheby's, Morrell, Acker Merrall & Condit, and Wally's are just a few of the many auction houses that have reputable consignment programs for private collectors.

 
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