Investment grade wine finally knocked classic cars off the winner’s podium
Investment in fine wine is one of the collectible investment options for investors. With the population of wine drinkers increasing the world over, investing in fine wine makes for a great income generating venture. The ever-growing population of wine drinkers provides investors with a ready market for their products and investors are able to reap amazing rewards for their investment efforts. Wine enthusiasts will pay top dollar for the best wine and investors who are able to mature their wines properly stand to make huge profits from their investment. Wine appreciation rates are usually very high and wise investors should look at wine when making investment decisions. When compared to other collectibles such as classic cars, coins, and stamps, fine wine emerged as the best performing investment option. That position was previously held by classic cars but a spirited performance by fine wine saw it knock classic cars off the winner’s podium.
Fine wine’s performance over the last year.
Fine wine witnessed a great year that saw it emerge as the most profitable collectible investment option. The value of wine rose by 24 percentage points over the past year, earning its investors great returns for their efforts. Other collectibles performed moderately with classic cars the best of the lot with a 9 percent increase in their value. Others options such as coins increased in value by a mere 3 percent with classic art pieces witnessing a decrease in value by a whole 14 points.
Investment grade wine’s performance was aided by the steady growth in its key investment areas all over the world. Bordeaux has been the backbone of the wine industry for some time now and improvements in this region greatly boosted the performance of investment grade wine. The Bordeaux region took a great hit when the Chinese investors pulled away in 2011. This saw a great decline in the value of wine since then but started looking up from 2015 when the value of wine gained value by about 8 percent. The continued strength of the Burgundy’s wines was also helpful in the resurgence in value post the Chinese pull away. To illustrate the impressive performance of wine over the last year, one case of 1988 Romanee-Conti wine was sold at $158,000 at the Bonhams auction.
The performance of collectible cars as investment options.
Cars performed admirably in the last year but not as great as fine wine. A decline in the demand for classic models such as Porsches and Ferraris led to a decline in the value of classic cars as an investment option. 2014 and 2015 was a great year for classic cars and this saw it emerge as the most sought after collectible investment option. The decline in the demand for certain models and the overhead associated with maintaining classic cars in the best condition led to a slight decline in their value. Classic cars enthusiasts are also very limited and the boom in 2014 and 2015 somehow exhausted this market. The market for classic cars is not increasing as rapidly as that of wine and this played a major role in their decline.
Another factor that contributed to the decline in value of classic cars is the cost of acquiring the cars. Automobiles, whether classic or modern, are quite expensive and this makes them slow moving market commodities. It, therefore, takes longer to move classic cars and this has the effect of reducing their value. Unlike wine that improves in value the longer they are stored, classic cars don’t. In fact, your maintenance costs increase and this eats into your returns.
Investing in wine.
There are different options when it comes to wine investment that help investors minimize their expenditure such as buying ‘wine in bond’ or wine enprimeur. Wine in bond is that which is held in customs-approved warehouses and their tax duty has not yet been paid. The advantage of buying ‘wine in bond’ is that you can sell it when it is at the warehouse and you won’t have to pay the tax duty. When you buy wine enprimeur, you buy it before it matures and sell it at a later date. Such wine is very cheap and your returns could be great.