Wine investing: The bottles worthy of being in your portfolio

Financial news : Posted by Will Lyons on November 4, 2015

A good, well-managed cellar means much more than always having a good bottle on hand. If managed well, it can generate good returns – at the very least it should generate enough profit for the collector to rebuy and effectively drink for free. But it’s only going to do that if the wines are chosen wisely.

An investment-grade wine needs to possess three components:

• an ability to age and improve over a time span of between 15 to 25 years;
• a solid demand on the secondary market; and
• a powerful brand.

Sadly, that dusty old bottle of red you have squirrelled away under the stairs in all probability is worth very little. Measured against these three criteria, there are two regions that outperform all others: the very best wines of Bordeaux and Burgundy.

In Bordeaux we can narrow the choice down still further to the top eight, the classified first growths (premier crus) of the Medoc: Châteaux Lafite Rothschild, Latour, Margaux, Mouton Rothschild, Haut Brion, and a small number of wines from the Right Bank, notably Pétrus, Le Pin, Cheval Blanc and Ausone. With the exception of Le Pin, all these wines have the benefit of being produced in large enough quantities to trade.

It is always good to invest in something where there is strong demand. As such, brokers say if you are buying into the Bordeaux market now, the best value at the moment is to be found in back vintages, notably 1982, 89, 90, 95 and 2005.

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