Top 5 things to understand about investing in wine
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At Bluefox, we focus a majority of our time on the three private markets we invest in. But we are curious by nature and try to keep track of recent developments in the alternative asset investing ecosystem. Over the course of the next few weeks we will be going on a journey to understand an alternative asset that is new to us, WINE! We thought it would be great to share this experience and knowledge with you. If you are an expert wine investor and would like to contribute to this series please contact me directly.
Let's learn some basics:
Wine investing is when you buy and hold bottles of wine as a tangible asset in hopes of selling them later for a profit. Here are the top 5 things to know about investing in wine:
1. Investment-Grade Wines: Not all wines are created equal. Some wines have a higher likelihood of increasing in value over time, known as investment-grade wines. These wines typically come from the most prestigious wine producers, have a limited production, and excellent ratings from wine critics.
2. Storage Matters: Wine requires careful storage to maintain its value. Temperature, humidity, and light can all affect the quality of the wine. So, it's crucial to store your investment wines in professional wine storage facilities.
3. Costs: Investing in wine requires an initial investment, plus ongoing storage costs, insurance, and capital gains tax if you sell your wine for a profit. It's essential to understand these costs before investing.
4. Risk: Investing in wine, like any investment, carries risks. Prices can fluctuate, and there's no guarantee that your wine will increase in value. Yet, investing in high-quality wines from reputable producers can help minimize the risk.
5. Platforms: There are several wine investment platforms and auction houses where you can buy and sell your investment wines. Some of these platforms offer liquidity and transparency, while others offer limited investment options in specific wine regions or producers. It's essential to do your research before choosing a platform.
If you are curious below are a few wine platforms:
We will take a deeper dive into these platforms in a later post.
Next week, we will learn the benefits and risk in investing in wine.
