The global financial crisis and the low-interest rates increased the demand for diversified investments, in particular in physical assets with an intrinsic value and natural supply limitations.
The so-called “passion assets” stand out, for example, fine wines. Their primary purpose is to fulfil a passion, and their financial returns over time are difficult to ignore. One of the most significant Fine Wine price index, the Livex 1000, went from a base 100 in 2003 to over 397 in July 2019 (the index is in Euro). In other words, the value of a selection of the most traded wines in the world almost quadrupled its value within the last 17 years.
Different ways to invest
Investment in wine can take different forms:
- investing in shares of companies active in the business, easily disposable, but more related to stock market fluctuations than to the intrinsic value of the wine itself;
- investing in a winery, which requires significant capital and time to dismiss it profitably;
- investing in the wine itself, the authentic essence of a passion asset, liquid by definition and flexible to the maximum degree.
How to define your investment goals
The analogy with traditional investments also applies in defining the objectives of investing in fine wines: risk and volatility, in terms of time and the ability to exit the market.
Risk and volatility, at least in the medium term, are moderate if you choose to invest in brands where high volumes are regularly exchanged (such as Monfortino 1995, Sassicaia or Tignanello 1998 and 1999). Their price is generally stable, and the supply-demand match tends to rise it in the medium term. The quality, in the first years of the product’s life, improves as a result of the wine refining in the bottle and the decrease in the quantity available on the market as a result of consumption.
Niche labels can lead to higher appreciation, with higher volatility and a risk factor connected to trends always affecting the wines’ world.
You also have to plan the exit time of the investment since the beginning: for long periods it is necessary to prepare a proper rotation of labels and vintages, bearing in mind that selling bottles at the best prices takes time even with the best market connection.
Why invest in Italian wines now?
After a long steady growth in particular for Burgundy and Champagne, the price of French wines has slowed down. In the second half of 2019, the investor’s attention turned to Italy, whose wines showed significant growth rates compared to the transalpine ones.
The spotlight is on Langhe wines in general, where among others Bartolo Mascarello’s Barolo 2014 and Giacomo Conterno’s Monfortino 2010 showed relevant price increases in 2019. Even more on Bolgheri wines, with Masseto 2015 and 2016 in the forefront thanks also to the two consecutive 100/100, and Sassicaia, performance champion in very different vintages, from the most accessible 2013 to the legendary 2015 and 2016, with Solaia and Ornellaia completing the group.
Always increasing in value, we find, in Tuscany, Brunello di Montalcino‘s famous Biondi Santi, Soldera, Casanova di Neri, and some established brands such as Tignanello and Pergole Torte. In Veneto, we find the wines of Valpolicella, with the celebrated Amarone’s of Quintarelli, Dal Forno, Masi, Bertani.
You can have higher returns at the price of higher risk outside these classic areas, with excellence distributed throughout the national territory, from Miani in Friuli to Valentini in Abruzzo, from Montevetrano in Campania to the Cru’s of Tenuta delle Terre Nere in Sicily, to Gianfranco Fino in Puglia.
Invest in Italian wines by bidding at auctions
Investing in a “passion asset” such as wine must be profitable, but also enjoyable, and the auctions add the excitement of winning and the pleasure of possessing a sought-after bottle of wine.
Buying at an auction house, however, has vital advantages that go beyond the emotional aspect:
- the wines are carefully selected, based on quality and the preservation;commerciali,
- unlike the most excellent wines sourcing channels, rare and already refined wines can be found at auctions, ready to express their full value best;
- starting prices are always very competitive, and when the battle of the bids is not too hot, it is possible to win exceptional wines at values significantly lower than the standard market value, with the quality guarantee of the auction house;
- Finarte has an online platform where it is possible to check the auction catalogue beforehand (such as the one’s of our upcoming auction). Using convenient filters, that facilitate research, you can place your bid in advance on the lots of most considerable interest.
Prossima asta
Wednesday 15 July 2020, 03:00 PM • Milan
