Sip It or Cellar It? The Basics of Wine Investing

(Forbes) - Visitors to Liv-ex might be forgiven for thinking they were on a typical financial and trading news site. The site is peppered with charts and graphs showing commodity prices and performance over time. There’s even a ticker at the top of the page with stock prices scrolling by. But unlike countless other trading sites online, Liv-ex only measures one commodity: wine.

With a tough economy and a fluctuating stock market, people have been exploring unconventional investment opportunities. Wine has become an increasingly popular investment commodity during the past decade, and the Liv-ex 100—an index that tracks the 100 most sought-after wines—is the industry benchmark.

While prices on the Liv-ex 100 have stabilized and the exchange’s merchants are cautiously optimistic about future performance, first-time wine investors have a lot to learn before buying their first case of Bordeaux.

Uncorking the Basics of Wine Investment

Investing in wine requires more than just putting a case or two in your basement. The first thing novice wine investors need to understand is the wines themselves. Almost all investment-quality wines come from five regions: Bordeaux, Champagne, Tuscany, Burgundy and the Rhone.

While the four latter regions are gaining in popularity, the Bordeaux region continues to serve as the gold standard for wine investors. According to wine trading platform Cavex, two cases of Chateau Mouton Rothschild 2005—an iconic wine from the Bordeaux region of France—recently traded for £4,100 GBP (about $6,566 USD). Meanwhile, four cases of the Burgundy wine Ponsot Morey St. Denis Alouettes 2009 went for a more modest £275 GBP (about $440 USD)