Time to sell? DRC hitting record highs

Steve McConnellDomaine de la Romanée Conti (DRC) continues to see exceptional price rises, with a world record $476,000 paid for a 1978 Romanée Conti at Christie’s in Hong Kong over the weekend. Indeed, the auction highlighted the current popularity and price premium of Burgundy and DRC specifically, with six of the ten most expensive lots being wine from this in-demand domaine. Many in the industry are hailing the auction as a sign of Burgundy’s continuing bull run which has seen prices  continue to rise during Bordeaux’s 2011-2012 correction, especially DRC.

However, if the Bordeaux correction has taught us anything, it’s that rising prices do not necessarily indicate buying opportunities. Often, by the time a wine or region has reached the point that the industry is raving about it, it’s usually too late to capitalise on the really significant gains. Indeed, sometimes the amount of hype around a wine may be an indication not to buy it, as I alluded to in my blog last week – wine investment is simply too long-term for such buying strategies to make sense. In fact, there is a strong case to be made that now may actually be the time to consider selling DRC in your portfolio.

Of course, there is nothing to indicate an impending drop, and it may be the case that DRC and Burgundy continue to do well. However, with prices at record highs in Burgundy, and exceptional value to be found in Bordeaux at the moment, it could make more sense to take profit on Burgundy, refinance back into Bordeaux, and wait for the tables to turn.