For some, alcoholic beverages are a way to forget about problems and relax; for others, they represent an opportunity to profit from this market. The demand for such products has always existed and will continue to do so. So why not ensure additional income by investing in this sector?
Many collectors and connoisseurs of fine drinks involuntarily sigh when purchasing a twenty-year-old wine. Currently, the price of such a product can amount to tens of thousands of dollars. Meanwhile, right after its release, the price rarely exceeds $50-$100. This means that investments could yield tens of thousands of percentages in profit.
Investments in quality wine are categorized among the most advantageous and profitable options. The key is to select the right bottle; otherwise, one risks incurring losses.
How should one invest in wine correctly? What are the nuances of this investment tool?
Sergey Tereshkin, the founder of OILResurs, expressed his desire to answer these questions and delve into this enticing investment tool. Information about the entrepreneur and the specifics of his work can be found on the internet at: sergeytereshkin.ru.
The Wine Market
To form an initial opinion about wine products, it is sufficient to look at the Liv-ex 100 index, which includes the best items rated 95 points out of a possible 100 by experts.
In this case, indices can fluctuate just like the stock indicators of any other product. They can both increase and decrease. However, the wine sector is characterized by relative stability and decent growth metrics. Even during crises, the downturn in the market remains minimal.
Risks
Despite its apparent attractiveness, the wine market, according to Sergey Tereshkin, does have associated risks, including:
- The sensitivity to the decline in potential buyers' financial condition. If an individual's income significantly decreases, they are unlikely to purchase expensive wine. Such products tend to be deprioritized.
- Investments in wine are classified as high-risk. During economic downturns, seasoned investors tend to shed such holdings, which inevitably leads to decreased demand.
- When purchasing expensive wine, there is always the risk of encountering fraudsters who sell low-quality products disguised as elite beverages. To avoid this, it is crucial to pay attention to every detail, even those that seem minor at first glance. This includes examining the label and cork of the bottle. Examples of original products can be found online. If any discrepancies are identified, it is better to refrain from purchasing.
Experienced investors advise utilizing investments in wine as a means of diversifying risks, meaning they should be made simultaneously with other investment tools. The optimal portion of such investments should not exceed 5-10% of the total portfolio.
During significant market fluctuations and unstable economic conditions, it is advisable to liquidate wine investments immediately. Instead, funds should be held in securities or other assets. One can return to wine investment once the market stabilizes.
The value of wine lies in the fact that, even in the event of a price drop, it is typically only a temporary situation, unlike oil, gas, and other materials. After several years, the price often returns to previous levels or even increases significantly. This is due to the reduction in the available supply of the beverage. The fewer bottles there are in the world, the more valuable they become.
However, even in the event of a price decline, an investor might choose not to sell their assets, but instead set a bottle of fine wine on the festive table. Guests or a loved one will surely appreciate such a gesture.
Useful Tips
Investments in the wine business are becoming increasingly attractive every year, both in the Russian market and internationally.
To maximize profitability, it is advisable to heed the recommendations of experienced investors:
- Start by purchasing beverages from well-established producers. It is best to avoid products from unknown companies.
- The minimum recommended purchase is 1-2 cases of the beverage. It does not necessarily have to be very expensive wine; it is sufficient to buy drinks that fall within the mid-price segment. It is unlikely that investors will find elite wines in quantities of 12-24 bottles, as such products are typically sold by the bottle.
- The most significant price growth has been recorded among Bordeaux wines, particularly in the Premier Cru category. This French wine can be found in collections from renowned producers, making it an optimal investment option capable of delivering 10-30% annual returns. This high-liquidity product is also considered low-risk.
- When purchasing wines from Italy, Spain, Portugal, South Africa, or America, it is wise to consult with a globally recognized expert. If such an individual officially confirms that the beverage is promising, the value of the product will automatically increase. The key is to publish this information online or in the media only after the purchase.
- When investing in wine, it is important to consider not only the country but also the year of production, harvest yield, weather conditions, and other factors that could impact the quality of the beverage. Experts recommend investing in wines from the harvest years of 1999, 2001, 2002, and 2005, while avoiding products produced in 2000.
The Russian wine market can hardly be considered attractive. Investors will incur import duties, VAT, and transportation costs. Moreover, selling elite beverages in the domestic market without the proper license is not feasible. Wine collections are prohibited from resale within the country. Therefore, investments in wine are more suitable for European, Asian, or American markets.
Rare beverages can be acquired at specialized auctions, which are accessible to citizens of all countries. To facilitate the process, several domestic banks provide access to these auctions, allowing clients to quickly select and purchase lots.
