1. Pick a strategy and stick with it.
Different people use different methods to pick stocks and fulfill investing goals. There are many ways to be successful and no one strategy is inherently better than any other. However, once you find your style, stick with it. An investor who flounders between different stock-picking strategies will probably experience the worst, rather than the best, of each. Constantly switching strategies effectively makes you a market timer, and this is definitely territory most investors should avoid.
2. If you are dealing with a wine fund or specialist wine investment company, look at their track record. How have their funds or portfolios performed historically. Also check what charges and commissions are involved.
3. If you are buying independently for a capital return, stick to investment grade, red Bordeaux from the best vintages. Bordeaux makes up over 90% of the wine investment market. Bear in mind that generally, the back vintages offer greater investment potential than more recent vintages.
4. When you are buying wine for investment (or drinking), always compare prices and shop around. A good way to do this is on www.winesearcher.com
5. Rather than buy a large number of inexpensive cases, it makes more sense to buy a small number of high value wines. Otherwise, annual storage charges will significantly reduce your profits.
6. Generally, wine does not attract capital gains tax as it is considered a wasting asset by the revenue.
7. If you are buying wine, do not invest more than you can afford to lose. Wine has proved to be a resilient asset class over the long term, but recent events have shown that wine prices do go down as well as up. Wine should only represent a small part of your overall investment portfolio.
8. Champagne has provided some very good returns to investors over the last two or three years. At times it has even outperformed top class claret. However, only stick to the top prestige cuvees such as Krug Vintage, Roederer’s Cristal and Dom Perignon. Also bear in mind that some consider Champagne to be a more risky investment compared to red Bordeaux.
9 Do not keep un-real expectations or expect abnormal returns on your investments. Do not make extra commitments in the greed to have extra and more returns. Do not overstrain yourself.
10 Make all calculations yourself, instead of depending on the seller. Try to make a benchmark of reasonable return and concentrate on the strategy.
11 Do not exit from any kind of investment because some other investment promises a better return. It’s best not to make a decision on others tips and suggestions. You have to make a difference on the basis of projects and products which are offered.
12 If you are making an investment in real estate, lay stress on the location. This is an important criterion which needs serious consideration.
13 Check out the value appreciation graph of your existing investments before you think about withdrawing from any kind of investments. Do not repeat any mistakes which you have done in the past.
14 You should know more about people who are involved with your investments. This may be your builder, realtor, banker, developer or consultant and try to find out more about them. This will help you to understand if you have made a correct decision.
15 Check out and know about any recent trends of the market and keep a track of all prevailing technological advances
16 If you are making an investment do not go for ‘value for money’ deals. Instead you should take time to make evaluations on the basis you will invest your hard earned money.
17 Do not hesitate to ask and act. As a buyer it is natural to have many questions. Do not progress if you have doubts in your mind as you will make wrong decisions.
18 Don't overemphasize the P/E ratio. Investors often place too much importance on the price-earnings ratio (P/E ratio). Because it is one key tool among many, using only this ratio to make buy or sell decisions is dangerous and ill-advised. The P/E ratio must be interpreted within a context, and it should be used in conjunction with other analytical processes. So, a low P/E ratio doesn't necessarily mean a security is undervalued, nor does a high P/E ratio necessarily mean a company is overvalued.
19 Focus on the future.
The tough part about investing is that we are trying to make informed decisions based on things that have yet to happen. It's important to keep in mind that even though we use past data as an indication of things to come, it's what happens in the future that matters most.
20 Be open-minded.
Many great companies are household names, but many good investments are not household names. Thousands of smaller companies have the potential to turn into the large blue chips of tomorrow. In fact, historically, small-caps have had greater returns than large-caps; over the decades from 1926-2001, small-cap stocks in the U.S. returned an average of 12.27% while the Standard & Poor's 500 Index (S&P 500) returned 10.53%
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