“An investment in knowledge always pays the best interest.
– Benjamin Franklin
Go for the blue chips!
There is no better analogy than the equity market – simple stocks and shares. For the ordinary investor, the best advice has always been to invest in blue chip stock, lock them away and take profit from capital growth. With wine however, there are no dividends; except for the occasional bottle you may uncork out for your own pleasure!
What can one reasonably expect in the way of capital growth? On average, the gain is 10-15 per cent annually, but there is a rider to take note of; the waiting game. One cannot expect to buy and sell within a year and make the 10-15 per cent. With wine, whisky or art, some patience is necessary. Generally, one has to wait for some time for gains to accrue.
Luck of the cult!
There are precious few wines where one can realise a good level of profit in the first few years. These are the iconic wines such as Margaux, Latour and Lafite from the Bordeaux region of France. There are also cult Spanish wines such as Valquejigoso, Italian wines as in the Antinori stable and California Screaming Eagle. Blue chip wines will increase steeply in price for the first few years and then plateau off until the next upward climb. Cult wines will show little capital growth in the first years, but as the market recognises their true quality, their values rise more steeply.
Invest at the price offered by the wine consultant to its clients; the wholesale prices as it were. The maximum potential for growth (and profit) comes when one is able to buy direct from the consultant and in reasonably substantial quantities.