The Dow goes up, NASDAQ goes down, the Greeks riot, and the market plunges. Let’s face it: The stock market can be a scary place to play with your money.
But wine is always appealing. It’s no wonder that just about anyone who gets serious about their wine eventually thinks about hoarding a bunch of fancy bottles as an investment.
You’ve likely read the stories about investors who filled their cellars with fine old Burgundies and the Rothschilds’ Bordeaux and made a killing.
Maybe you’ve even thought about dabbling in this market yourself, figuring that if the deal doesn’t pan out, you can always drink your losses.
But the wine-loving bulls of Wall Street to the contrary, wine as a financial investment is a risky thing. Fine wine is far less predictable than more traditional investment commodities.
What’s more, a traditional investor may keep his portfolio in a safe-deposit box at the bank. Even commodities investors don’t really have to unload 20 tons of pork bellies into the garage.
The would-be wine investor, however, must take possession and keep the property in long-term storage. Temperature-controlled cellaring facilities are critical — a naturally cooled or electric cellar unit capable of storing all the wine at a constant 55 degrees. 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. Invest in wine simply for your own pleasure, taking your profits in tasting pleasure. That way, you can hardly lose.
This article appears in May 11, 2010.
