
Should I invest in wine?
I am thinking of expanding my investments. I have money in my property, pension and in some Shares. I have an interest in wine and I’m wondering if this looks any good?
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I’m going to say, (and this isn’t to be sarcastic), that if you have to ask on Yahoo! Answers whether you should invest in wine, that you should not. Why? There are so many reasons. Across the world, wine production has been increasing, and prices have been falling, and wealthy emirates and similar types have been jacking up the prices of the best wines, creating a price bubble. Recently, grape farmers/wine producers in France rioted because they could not get break-even prices for their grapes.
True oenophiles are disgusted at the ridiculous prices currently being paid for the best wines, as it’s supposed to be about the wine, not the money (ok, and for the money too, but the wine takes precedence). All this money has attracted criminal activity, and some auction houses have “accidentally” sold counterfeit wines recently. Wine used to be a leisurely gentleman’s pastime; now it looks more like a noveau-riche catfight. It’s not a game for newbies.
One doesn’t usually invest in wine the way one invests In The Stock Market, although there are wine-based mutual funds around. If you can find one with a track record, this might be a more reasonable path.
Most people who invest in wine do it as a sort of lifestyle choice–one becomes a wine student and/or a wine bum, learning about wine, traveling to wine regions, sampling wine, making wine, and talking about wine. From that vantage, one then has the inside knowledge necessary to make good decisions about wine and wine producers and wine prices. It would be an enjoyable education if you could get it. From there, you could invest in individual vintners.
A true wine investor would never rely on wine information from marketing flyers. Wine tastes are too personal, and wine marketing is too subject to hyperbole and gentlemanly fraud. Have you ever gone on a wine tasting to some newish vineyard, where the owners/producers talked up the wine, but when you tasted it, it was horrible, yet out of politeness, you knew you had to keep your mouth shut? This is no way to have to make an investment.
You must have the personal understanding and knowledge of wine to make the best decisions about what’s investment-worthy. Some wines will age well; some won’t. For your wine to appreciate, it will have to be of a character to spend at least a decade (more would be better) in a cellar. If your wine doesn’t age, then your investment is completely lost.
Your question references Investing in bottles of wine, with the hope that they will appreciate in value. The problem with this at present, as I see it, is that prices of all sorts of luxury goods have reached speculative levels already, simply because there is so much money chasing what goods there are. In a bubble situation, the prices always fall before they go back up–if ever. You will have to spend considerable money storing your wines properly. In order to preserve your investment, you won’t be able to drink the wine–to the eternal frustration of your clamoring friends, to whom you will show off your bottles–and it will take many years (perhaps a couple decades) for your investment to appreciate. Personally I think I’d rather see the balance increasing in an investment account than worry about a bunch of bottles in the cellar.
Do a bunch more homework before you buy any investment bottles. Learn what will age well. Investigate wines internationally. Be sure to sample liberally. When you’re ready to jump in, buy a few cases of something. Keep one case aside, and have a bottle a year or so, to see how it’s coming along. Do this as an enjoyable hobby, and don’t look at it as a money-making opportunity, although, with good fortune, it will turn out for you to be both.
Invest your $5000 in wine
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