Three of the most misunderstood and complete words in invest are these: Buy the dip. What the heck does that even mean and how does it apply to investing in wine? Sounds scary, especially now with the volatility of the economy and the shifting tides of investment strategies. Buying the dip when it comes to asset grade wine applies to wine investment almost exactly when investing in stocks, bonds, commodities or any other item of value. During the past 40 years wine investment has outpaced the S&P 500 by more than 400% and while this is wonderful it is unrealistic to think that wine will increase in value in a straight light pointed to the sky. In the current market even real estate is taking a hit.
San Fransisco is a great example, commercial buildings that were once valued at $100 million have been sold in the past months at more than 60% mark down. It is a quiet secret that more millionaires are minted during hard times than good and with wine investment it is no different. Yes, you will have the Bordeaux big 5 (Latour, Mouton Rothschild, Lafite, Margaux and Haut Brion) always commanding high prices but there are 4 other classified growths from the 1855 ranking that are pulling in prices that rival the Premier Grand Crus. Chateaus like Lynch-Bages, Cheval Blanc and Ducru Beaucaillou will make tongues wag but there are many more jewels yet to be uncovered. Wines like Duhart Milon, Gaffelier and Quintus will not only quench your thirst but will store value as much as your vintage Omega watch or Bugatti supercar, plus you can drink them.
Wine investing these days is as easy as point and click with the aid of modern tech. But there is still the old way of actually traveling to a destination like En Primeur to do a little futures investing. Another way to do this is to visit the wineries directly (if permitted) and buy directly from the source. Plus there is never a better wine than the one you have in the vineyard. How many times do people tell the stories with love in their eyes about Domaine so and so, and how they were in the cellar doing barrel tasting with the owner and or head winemaker, how they fell in love with the vineyard dog that manages to find all the dirty spots outside and bring it all inside. A close analogy would be going to the Black Forest in Germany whilst picking up your new BMW and driving it around the Autobahn before shipping it home. And since this is obviously something you love, it will be easy to learn about. One can learn about soil, climate, winemaking and apply it to your wine buys.
If you know you prefer new world style wines, then California is the obvious place to start: Screaming Eagle (if you can get your hands on some), Dominus and Harlan are the equivalents of the Bordeaux big five. You can round that out with some wines from places like Australia with Penfolds Grange and Vena from South America.
The choices are numerous and become manageable when you have a little idea of your own tastes whether drinking it or not. If you can believe it, some wine investors never see the wine or even the wood crates many of the bottles come in. Others build elaborate vaults for their wines and treat them as religious items. Then again wine has been written about in such terms since the Bible or the Vedas of India. Think of this for your next wine trip, a little vino in your favorite place plus buying wine that can pay for your kids college. Yet another reason to buy some wine. When you're ready, let me know and I'll take you there. Cheers