Investing in wine: Is it a good idea?
I'm sure you've read the stories about investors who've filled their cellars with California Cabernet and the Rothschilds' Bordeaux in hopes of making a killing. Maybe you've even thought about taking a flyer in this market, figuring you can always drink your losses!
But the wine-loving bulls of Wall Street to the contrary, wine as a financial investment is a very risky thing. Fine wine is far less predictable than more traditional investment commodities. What's more, the would-be wine investor also must consider long-term storage. Temperature-controlled cellaring facilities are critical -- either a naturally cooled or electric cellar unit capable of storing all of your wine at a constant 55F (13C). Even then, a power failure can wipe out your inventory; while a negative review from a major wine critic can impose a paper loss from which you'll never recover.
My advice? Anyone who views wine as a mere investment would be better advised to get into more traditional markets that hold a more substantial hope for success. But if you're investing in wine simply for your own pleasure, looking for your profits in tasting enjoyment, then you can hardly lose.