Knowing when to sell fine wine is tricky. As with any kind of investment, choosing the right moment to realise your assets is a delicate balancing act. Market conditions, the popularity or rarity of a particular vintage and your own long-term plan all play a part.
Three factors that impact your decision on when to sell fine wine
Deciding on the right wines to invest in takes research and an eye for detail. And when it comes to ultimately selling that wine, the same applies. So, take your time and don’t rush into selling your assets too quickly. Fine wine investment is a long-term commitment, so be patient.
Here are three key factors to bear in mind as you weigh up whether to hold or sell your prized assets.
1. The sale fits with your overall investment strategy
Why are you investing in fine wine? Any investor, regardless of the asset class they’re putting their money into, must have a long-term investment strategy. This brings together factors like your own appetite for risk as well as the period of time you are willing to wait before seeing a return on your investment.
Are you hoping create a nest egg for retirement? Or has life thrown up something unexpected that means you need to generate a quick profit over the next year or two? Whatever your financial goals, use them as a frame of reference for every decision you make around a sale or purchase. If selling now takes you a step further towards realising your goals and is in line with your strategy, then it is the right time to do it.
2. The wine is reaching its peak of maturity
Wine is unlike most other asset types in that it has a specific and fairly predictable window when it’s at its most valuable. If you’ve done your research and read the tasting notes on your chosen vintage you should have a good idea of when it will be at its most attractive to buyers.
Our advice is that for the maximum return on your investment you’ll need to sell your wine around a year before it reaches peak maturity. Buyers will be far more willing to invest in wine whose best is still to come. Conversely, the value of a fine wine will drop off quite severely once it is past its peak, so be careful in your timing.
3. You are running out of room in your cellar
As basic as it sounds, this is actually a very common driver behind deciding on a wine sale. The right kind of wine storage is fundamentally important in wine investment.
But few of us have unlimited space and so selling off portions of your cellar is often the only option. As well as realising some of your valuable assets, freeing up space in your cellar also allows you to branch out into new areas. Wine investment should always be enjoyable. Discovering new regions, producers and vintages is all a part of it.
How to sell your wine
Finally, a quick word about how to actually sell your assets. Even when you’ve made the decision to sell, choosing the wrong selling option could cost you valuable profits. If you’re using a broker to manage your portfolio, you may not need to worry too much about the logistics of actually selling your wine yourself. If not, here are a couple of options.
- Sell at auction
Unless you’re selling a uniquely rare or a very high value bottle, auction houses are unlikely to look at sales of single bottles of wine. But specialist wine auctions are a good option if you’re selling a few cases, or even a section of your whole cellar. Selling at auction is perfect if you have a popular vintage to sell. The best auction houses have a readymade following among wine enthusiasts, so you should get plenty of interest. The biggest issue however is high selling fees.
- Use an online marketplace
The better option if the high fees of specialist auctions put you off. Online marketplaces are easily searchable and attract lots of potential buyers, meaning it can be easier to get a sale. The best ones also offer more safeguards for both buyers and sellers, meaning peace of mind for all parties.