A Toast to Burgundy

iStock_000016005088XSmallLo and behold, it’s the fine Burgundy’s turn to share in the investment limelight and its investors are joining in the general euphoria resulting from the strong wine performances in 2013. According to the Liv-ex 100 index, the fine wine market has shown healthy gains in four consecutive months of this year and now stands at 8.7 percent higher than November 2012. A collector of market data, Cellar Watch is pinning much of that rise on renewed interest in Burgundy. Some of those top sellers were the Pape Clement 2010, which gained 45% in value and Pichon Baron 2004, whose value increased nearly 20%. On top of that, Bordeaux is still holding up its end of the market with gains of 6.8%. The race will be closely watched to see if Burgundy, which is enjoying prices that exceed £2,000 per bottle, can sustain its growth and keep up with the more traditional Bordeaux that is typically included in financial portfolios.

Trustworthy as a Stable Investment

Although the Baroness Rothschild would like to remind us that wine is intended for consumption, it has also shown itself to be a profitable investment. While it’s a fact that some wine collectors buy fancy vintage to show off their social status, this is nothing new. In fact, different grades of wine were matched with guests at Roman banquets and served according to their social status. Today, the majority of those who buy bottles or cases of wines from the best estates do so for investment purposes. They are usually bought through a wine merchant or fund and sent straight to professional storage centers. Investment in fine wine tends to stand steady even throughout recession and can add a safe diversification when mixed in with stocks and more traditional investments. Even with fluctuations in the market, a case of fine French wine that could have been picked up for £4,000 a few years back will now cost closer to £8,000.

Matching Your Wine Investment to Your Portfolio Needs

iStock_000013320303XSmallInvesting in fine wine can be one of the most fun and exciting investments you will ever make, but it will also teach you patience. That’s because one of the first prerequisites in successful investment is the ability to wait. Unlike other types of alternative investments, wine does not offer a quick buck or a fast turnaround. According to your portfolio needs, choose a wine that will come of age during a year you will be ready to sell. For instance, En premier wines produced in Bordeaux have a minimum turnaround time of five years, making them a perfect choice for a short-term portfolio.

Once you have selected the best wine for your purposes, your next prerequisite should be proper storage in a licensed facility that can be documented at sale time. Temperature control, which is professionally regulated, is vital when it comes time to sell for the top dollar.

Wine For Sale in Dijon

Speaking of French wine, many cities in that country keep their own wine cellars stocked with local vintage. They break into their own stock when wooing official guests, hosting prestigious receptions or bestowing memorable gifts. We can only imagine that each bottle was stored in that city’s climate-controlled conditions. Thousands of those bottles in Dijon were recently auctioned off to make room for more and to rotate the stock. During storage for an undisclosed number of years, some of the wines had outrageously increased in value. The total receipts of the day came to some $200,000, but one of those bottles, a 1999 Vosne-Romanée Cros Parantoux, brought in $6,500. Proceeds went to the “social action” committee.

Officials in Dijon may have taken the idea from Paris, where 4,680 bottles of French wine were auctioned in 2006. Half of the proceeds, which totaled more than $1 million, were donated to a special anti-alcoholism fund.