How to invest in wine - which properties, regions and vintages
Bordeaux represents 90% of the wine investment market and should take the lion's share in any portfolio. Here, the top Left Bank Classified Growths represent some of the bluest of Blue Chip wines. So look for First Growth clarets like Latour, Lafite, Margaux and Haut Brion. The Super Seconds (a select number of Second Growths) are also a good source of investment potential. So too are some (but by no means all) 3rd, 4th and 5th growth chateaux such as Lynch-Bages. On the Right Bank, the most sought after names include Cheval Blanc, Petrus, Le Pin and Ausone. Chateau d'Yquem can also provide solid returns from certain vintages.
Beyond Bordeaux, a select number of Burgundies qualify as investments. Here the names to look out for include Domaine de la Romanee-Conti, Coche-Dury, Comtes Lafon and De Vogue. However, the secondary market for Burgundy is much less developed and therefore much smaller.
The same is true of the Rhone Valley, where wines like Guigal's single vineyard Cote Roties can sometimes (though not always) provide handsome returns. Generally though, the Rhone remains undervalued as a region and has yet to really establish its investment credentials.
A number of prestige cuvee Champagnes are also worth considering for investment purposes including Krug, Crystal and Dom Perignon. In recent years, Champagne has proved a very profitable investment even compared to red Bordeaux. At auction, great prestige cuvees continue to command very high prices.
Italy, Port, the New World - and the Bordeaux cults
Outside of France, investors need to be much more wary. Port is no longer regarded as a good investment bet. Some Super Tuscan wines like Sassicaia can on occasion perform well, as can a handful of Spanish wines. Some Californian and Australian wines have also appeared on investors' radars, particularly in local markets. However, these generally more modern and less well established wines are more prone to the vagaries of fashion. New and Old World 'Cult' wines from California, Australia and Bordeaux 'garagistes' are not the darlings of the market that they once were and are best avoided in the current climate.
Generally, the received wisdom when it comes to wine investment is to stick to the very great 'trophy wines' from Bordeaux (ie First Growths and top Pomerols and St Emilions) from the best vintages. The best Bordeaux vintages include:
1959, 1961, 1982, 1986, 1989, 1990 1996, 2000, 2005, 2008 and 2009
However, there are always exceptions. As mentioned before, 'small cap' stocks like Chateau Lynch Bages can perform surprisingly well for investors, but only from great vintages. Similarly, great trophy wines can offer excellent value in good or under-rated vintages. Poor vintages should be given a wide berth by investors, unless the wine comes from a top First Growth.
How much do I need to invest?
You can invest as little as £500 in a case of wine. But a minimum investment of £10,000 will enable you to create a more balanced portfolio so that you can at least spread your risk across a few Chateaux and vintages. Wine should only be a small part of your total investment portfolio. Moreover, you should not invest more than you can afford to lose.
This article has more pages:
- 1. How to invest in wine
- 2. How to invest in wine - Advantages and disadvantages of investing
- 3. How to invest in wine - which properties, regions and vintages
- 4. How to invest in wine - En primeur
- 5. How to invest in wine - Tricks of the trade
- 6. How to invest in wine - do's and don'ts
- 7. How to invest in wine - Top Ten Investment Tips
- 8. How to invest in wine - Top Ten traded wines by value
- 9. How to invest in wine - Bordeaux 2000 price increases
- 10. How to invest in wine - 10 great Lafite investments
- 11. How to invest in wine - useful contacts