Wine Investment Tips

Wine Investment

What makes wine investments exciting and risky

Investing in wines is a risky business and not for the faint of heart or budget. But those who understand and can weather the risks, will find this an exciting investment avenue. Global demand for wine is constantly on the rise, making fine wine an interesting investment option.

Tips for Wine Investment

Investing in Wine Australia

Although investing in wines is considered an alternative investment, since the mid 1990s it's become more fashionable to invest in fine wines. Australia is recognized as one of the best producers of fine wines in the world, making it a great place to consider investing in its wine business. Before you exploit this as a possibility, it's important to learn some facts about wine business.

Investing in Wines

As is the case with any other investments, wine investment often involves considerable risks and no guarantees. But investors who are well informed still find investing in wines an attractive option. One of the reasons for this is that they follow the reviews from well-known experts on wine. It's not a guarantee of success, but it can be a great guide.

Wine as Loan Collateral

Can wine be used as a loan collateral? Amazing as it sounds, it can. But as wine investing is a risky business and with all scams around, this option carries substantial risks. Some financial institutions in the U.S. are willing to grant loan in exchange for fine wines. One of the things with wine investment is that even if you have a rare wine, is the market willing to pay for it?

Recent reports by Morgan Stanley global financial services firm (as reported by BBC), suggest that global demand for wine in 2013 has exceeded supply by about 10%. This has caused the biggest wine shortage in the past 40 years. Global wine production was growing until 2004, when it started to recede despite ongoing demand for wines.

But if you plan to become a wine investor, you must be able to afford losing money. Scams aside, wine is particularly susceptible to a number of risk factors, such as being perishable, potential liquidity problems, as well as being subject to market demand, as most investments are. That's why good wine investment funds always have an exit strategy.

Nonetheless, for those who understand the risks involved and are prepared to deal with them, wine investment is a very exciting area that can be handsomely rewarding to smart investors.

"Money is not an invention of the State. It is not the product of a legislative act. Even the sanction of political authority is not necessary for its existence. Certain commodities came to be money quite naturally, as the result of economic relationships that were independent of the power of the State."

Carl Menger - the founder of the Austrian school of economics