The Controversy of Wine Investment

There is a debate about buying wine for investment. This can be characterized by the two ends of the argument: Wine Purist versus the Pure Investor.

The Wine Purist thinks that wine speculation is bad. It pushes up the price of wine for everyone. This camp claims the moral high ground and state that a pure and passionate hobby like wine collecting should not be sullied by using it to build wealth on the backs of the poor oenophile who cannot now afford the wines they love. They state emphatically that they would never sell their wine – it is only for their pleasure. This is often accompanied by a comment that they never think of the price of the wine, they only concentrate on the taste. Most wine collectors, without thinking, err towards this end of the spectrum.

The Pure Investor is always looking for ways to diversify a portfolio. They hunt for alternative investments that give them true diversification; that is investments that are not correlated to each other. One symptom of this is the drive into commodities, natural resources and emerging countries. The other is a focus on collectibles such as art, coins, and wine. For the Pure Investor wine is another investment, part of their total portfolio, which boosts their return and lowers their investment risk. The Pure Investor is only interested in profit, not in the wine as a pleasure source, and typically buys large volumes of First Growths – the sure bet in the wine investment world.