IT HAS an “extraordinary nose of caramelised herbs, smoke, cedar, pen ink, blackcurrants and earth. The gorgeous aromatics are followed by a full-bodied, plump, rich, fleshy wine with low acidity.” Thus Robert Parker, a wine critic, toasted the 1982 Lafite Rothschild.

A virtue he did not mention, however, was its quality as an investment. Wine lovers who scraped together £300 (£1028 in today’s money) for a case in 1982, and have resisted the urge to drink it, are now sitting on a £28,000 nest-egg. Few equities have done so well. In the hope of replicating such heady returns, investors have been pouring money into fine wine, now thought to be a $5 billion-$10 billion market.

Limited supply is part of the appeal: the very best wines are grown in tiny batches. Petrus, a much lauded winery, produces only 2,500 cases a year. The most feted producers are often prevented from expanding by law and geography, and it is impossible to replicate the weather that produced the 1982 Lafite. At the same time, demand has soared thanks to the growing ranks of the mega-rich, for whom a collection of fine wine can be the ultimate status symbol.

Brokers flogging wine as an investment offer impressive indices showing average annual growth rates as high as ten percent. Yet that is misleading. Prices surged in 2008-11, thanks largely to the seemingly unquenchable thirst of rich Chinese buyers. But it has since been slaked, both by China’s slowing economy and by a fierce anti-corruption campaign, which has discouraged conspicuous consumption. The price of the 2008 Lafite, which was marketed to Chinese buyers in particular, has dropped by half since its peak in 2011. Across the market as a whole, prices have stagnated since then.

Worse, the market remains small and, ironically, illiquid. Trades can take time, brokers and auctioneers charge fees as high as 20% and the lack of regulation allows scams to flourish. Although online trading platforms, such as WineOwners, and price-comparison sites such as Wine-Searcher are making investing more transparent, the market favours the well informed. And whereas stock-picking can be reduced to algorithms, wine-picking is much more subjective and influenced by a small number of critics such as Mr Parker. Nasty hangovers, alas, are common.