Wine Investment / Risks
Fine wine investments do carry a small level of risk. Like with any investment, regardless of stability and security, it is possible to make some very expensive mistakes unless you know what you are doing. With this in mind we have outlined some aspects of fine wine investment that everyone should be aware of before stepping into the market.
Risks of Fine Wine Investment
Past Performance is no Guarantee for Future Results
Even though the positive market growth has been consistent, there is no guarantee as to what extent this trend will continue.
Fine wine investments are not regulated by the financial governing bodies and regulators.
Fraudulent Companies and Boiler Room Scams
Many fraudsters and unscrupulous merchants will peddle inferior wines for investment scams. Be very wary of shady investment houses and only invest in a reputable and well-known company.
Quality of Wine is not static
The quality of the wine has a significant effect on its market and investment value; that is why provenance, storage and transportation are of utmost importance.
Temptation of Fine Wine Consumption
Fine wine was meant to be consumed and enjoyed. This can lead to poor investment decision-making as people may not be able to resist the allure of tasting the most expensive and prestigious wines in the world.
Fake wine bottles entering the wine market has also caused a massive setback in the wine investment world. The more money involved in any industry, the higher the crime and law-breaking rates. Hence it is absolutely crucial to ensure you are dealing with a reputable company or be well informed about wine conditions and fake bottles infiltrating the market.
Fine Wine Risk Assessment
One must establish the fact that not all fine wines, despite their high scores and renowned vintage, will increase in value. Only certain wines will accrue value over time and precisely for that reason, players in the fine wine market should be thoroughly educated about the industry, and the finer nuances when dealing with wine for investment purposes.
Our team at Bordeaux Traders uses a wealth of knowledge to correctly asses the market and minimize any risks while maximizing the potential return; we can ensure that our clients receive the right wines at the right time, and most importantly- at the right price.
Further reading on wine investment
Is investing in fine wine really tax free? Are investment wines exempt from income tax and capital gains tax? These are some of the salient questions posed by savvy investors when dealing with investments in luxury wines.
Timing is absolutely crucial – in life, as well as in the arena of financial investments. As mentioned in previous articles, the fine wine investment market is steadily moving into the mainstream of alternative financial investments.
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Bordeaux Traders - The Fine Wine Investment Brokerage GmbH
Kaerntner Ring 5-7, 1010 Vienna
Phone: +43 1 20511 60 1241
Fax: +43 1 20511 60 1008