Anyone invested in fine wine before?
To my thinking invest is not quite the right word. If I make an investment, I call my lawyer and have the details written into my will. If I will probably sell the item before I die, it is a trade. If I will use it up and discard the remains, it is an expense.
My wife and I enjoy wine, drink it regularly, lead a local wine club of about 500 people, have made wine (we had barrels), visit local wineries, know winemakers well, and have several bottles at home. My wife and I have discussed between ourselves and with local wine merchants what to do with any wine left in our collection when we are no longer drinking it.
Merchants buy wine priced in hundreds of dollars and lower at wholesale at prices that are half or less of retail prices, so bottles purchased at retail will not give a positive return when sold.
Collectors want rare wines. Bottles priced in four figures. Trading collectables of any category is fraught with problems — low liquidity, large bid-ask spread, counterfeiting, etc. Wine has the additional problems of being both variable in quality and perishable. Older might be better, but not always, and often only up to a point. One merchant tells us that the first question he asks of a private wine collection is how it was stored. Temperature fluctuation, or storage temperature above about 58 degrees Fahrenheit (24 Celsius), increases the rate of deterioration, as does vibration and light.
Buy good wine, drink good wine, enjoy good wine, share good wine. It is an expense. Not an investment. Not even a trade.
Best regards,
Howard
