MAIN Wine Investing

Like your investments liquid?

Investing in anything is risky, but wine adds the fickleness of the market place to a product that may not live up to predictions.

It's almost as if you were picking a 14-year-old sports star as a pro prospect in 10 years. Not impossible, but extremely tricky. Before you spend your money on wines that are supposed to double or triple their value in ten years time, make sure that you know the pros, cons, and pitfalls.

Like casual wine collecting, it all begins with a basic love and passion for wine.

Playing the wine market means an initial investment in an education — to learn about more about wine ratings and scoring, prices and futures. Meanwhile, it's the wise investor who will buck the trends and focus only on wines from the best vintages, and take advice from only top sellers (while avoiding the counterfeits and scams offered by the disreputable.)

Getting to know your way around top wine auctions, priority may then be put on buying insurance and building a high-caliber home wine cellar.

For the lucky and educated, wine can be a good investment. With growing demand for a limited supply of a popular product, some investors view fine wine as possibly one of the best alternatives to Wall Street.

Wine investment terms

As usual, this type of investment also comes complete with its own vocabulary.

Here are only a few of the top buzz words you will most likely encounter in your first foray into making an investment in fine wine, and may help you gain a more confident footing as you wade through the wine investment terroir.

• Auction hammer price: What the wine would usually fetch at auction.
• En primeur: The French term for wine which is sold as futures before it is bottled.
• Fake wines: Also known as "wine frauds", created specifically to defraud wine investors.
• First growth: In French, the 'Premier Cru' refers to the potential of the vineyard or terroir.
• Garage wines: "Micro chateaux" wines sold at prices driven by rarity, and marketing.
• Improving asset: Fine wine that is expected to improve over time,
• Investment grade wine: A blue chip wine widely regarded as a sound investment.
• Liv-Ex. International stock exchange for the trading of fine wines.
• Provenance: Proof of authenticity and ownership history.
• Small cap stocks: Less expensive labels which can occasionally provide good returns.
• Trophy wines: The rarest, most expensive wines.
• Super seconds: The top performing second growths.

Even if your picks turn out to be bad financial investments, at worst you may end up with some very fine liquid assets to share with friends - which leads us inevitably to the basic rule of thumb for new wine investors: never ever invest in more wine than you can drink! ..

also see -> Wine Collecting

More about wine investing around the Web:

Wine Investment - Get a virtual college education from decanter.com's special look at wine investing including chapters on properties and regions to invest in, where to buy and sell, top picks of great (and not so great) investments with general tricks of the trade and related resources for more information.

Fine Wine Investment Advice - A good wrap up of the basic essentials you need to know before you invest, with related resources to more information about storage, wine scores, wine futures, insurance and related topics from Wine Searcher.com.

Wine as an Investment - Information for the new wine investor including where to find the top wine auctions, investing in futures, counsel on avoiding the trends, with related case studies and examples.