The call of the vine may be tempting, but the wrath of grapes can be bittersweet.

Remember when investing in wine was no more complicated than deciding how many bottles of Boone's Farm to pick up for Saturday night? Boy how times have changed. Now, wine buyers get tickled pink over sugar content and average rainfall rather than a taste-off between Strawberry Hill and Wild Island.

The idea of investing in top-shelf wines has been around for decades, though the pursuit became especially prominent in the greed-is-good 1980s and again in the late 1990s as dot-com millionaires looked for new ways to spend their Internet riches. And while there's no question that a few made money on investment-grade wines, the reality is that it's a hard way to earn a buck -- even for the pros.

"Is wine a good investment? In general, no," says Kevin Zraly, founder of the Windows on the World Wine School in New York. "Are there specific wines from specific vintages that'll double and triple in value over a period of time? Absolutely. There was a time in the '80s and '90s when you could've done well with wine as an investment. But the world has changed, and you can't do it now."

Zraly's bearish outlook is understandable. Investing in wine is a highly speculative undertaking littered with obstacles. Supplies of the most-coveted wines can be exceedingly limited, consumers' tastes change constantly and it can take years -- often 10 or more -- before an investment-grade wine reaches its peak value. That's why wine should constitute only a tiny portion of an investment portfolio; specifically, the portion the investor can afford to lose.

That said, some believe it's still possible to profit from the purchase of carefully selected bottles. "Investment-grade wines, when properly stored in a proper cellar, have proven to appreciate far in excess of the Standard & Poor's 500 index," says Adam Strum, editor and publisher of Wine Enthusiast magazine. With the average annual return of the S&P 500 over the past five years at negative 11.5%, decide for yourself whether a case of wine makes more sense for your portfolio than a basket of equities.

Liquid Assets
By far the easiest way to invest is to buy shares of publicly traded wine makers such as Robert Mondavi (MOND), Chalone Wine Group (CHLN) and Golden State Vintners (VINT). However, the sluggish economy, an oversupply of grapes and intense price competition from a proliferation of new brands haven't been good for these companies.

Over the past 12 months, the S&P 500's 4% drop has handily outperformed the average decline of 20% among wine makers, which are suffering from the well-publicized grape glut. Share prices of the wineries mentioned above are lingering near five-year lows. Based on trailing price/earnings ratios, bellwether Mondavi is the cheapest of the bunch with a P/E of 16.2, less than half the industry average of 35.8. Chalone's trailing P/E is a richer 50.9, while Golden State hasn't posted an annual profit in two years.

"It's not a good time for the wineries, but it's a tremendous time for consumers," says Bud Leedom, an analyst at Wells Fargo Securities. "The industry is very cyclical -- it's always been that way. It's just a matter of finding the bottom. It's sort of a boom-and-bust mentality taken to another level."

Continues Leedom: "We're still suffering from the hangover of the new vines planted in the late '90s. The new vines will keep coming on-line until 2004. So in terms of the supply issue, we're at least four quarters away from the bottom."

But this shouldn't frighten off investors with lusty risk appetites. "In terms of share price, the speculative market is saying, 'It's a cyclical business, maybe now is a good time to get in,'" he says. "While we're a few quarters away from the bottom, I think buying shares at these prices and looking two years down the road, returns will be pretty good." (Leedom doesn't own shares of any of the wine makers, and Wells Fargo doesn't have investment-banking relationships with them.)

That's encouraging, but let's face it: A stock certificate is no substitute for the real thing. That's why many wine investors prefer to purchase actual bottles, which typically come 12 to a case. Premium wines that have the potential to appreciate can be bought from high-end retailers such as Morrells and through auction sites such as Winebid.com. Top French wines, which attract the bulk of investors, can start at $1,000 or more per case.

This secondary market tends to be pricey, since wines have had a chance to age, thus providing a better picture of their ultimate value. That's precisely why hardcore investors focus on wine futures, contracts taken out to purchase a wine while it's still in the barrel, a practice known as buying en primeur. Investors choosing this route pay today for wine that'll be bottled and delivered a couple of years later. Futures can be purchased from fine wine dealers such as Zachys in New York and Brown Derby Stores in Springfield, Mo., but check around to be sure a dealer is well-established. After all, nobody wants to return to collect a case of wine two years later, only to find that the dealer has disappeared.

Whether you take possession immediately or receive delivery years later, investment-grade wine needs to be stored properly. Bill Sokolin, the author of "The Complete Wine Investor," rents space in a special warehouse for $1.20 a month per case. Proper storage protects wine from the ravages of light and heat until it's ready to be auctioned off or consumed. Sokolin suggests buying at least two cases of an investment-grade wine. If you're lucky the sale of the first case will pay for the drinking of the second.

Geography Lesson
History has shown that the wine market can grow over time. From 1980 to 2000 the value of the fine-wine market, gauged by tracking prices of about 25 top wines, jumped 2,000%, according to Sokolin, who specializes in selling investment-grade wine out of his Bridgehampton, N.Y., company, D. Sokolin. More recently, Wine Spectator magazine has published its auction index of blue-chip wines on a quarterly basis. Starting at 100 in 1995, the index doubled by 2001 but has since fallen to 179.

The trick to investing in wine, of course, is figuring out which ones will be in demand a decade down the road. After all, the investment-grade market is made up of less than one-quarter of 1% of all the wine in the world, says Sokolin. The remaining 99.75% is good for nothing more than drinking. Much in the way of finding that tiny fraction of lucrative bottles, made up mostly of reds, which tend to age better than whites, boils down to geography.

Arguably the best wines originate from the great chateaus of Bordeaux, made primarily from cabernet sauvignon and merlot grapes. The five most prestigious names within this region of western France -- Lafite-Rothschild, Margaux, Latour, Haut-Brion and Mouton Rothschild -- are called first growths, or premier crus. Bordeaux also churns out formidable second, third, fourth and fifth growths as well as numerous unclassified wines. Unclassified Bordeaux such as Petrus, Cheval Blanc and Ausone are considered equal to first growths. A case of 1982 Petrus, for example, that originally sold for $600 can now command $22,000. In addition, some wines from Burgundy, a region in central France known for its reds made from the pinot noir grape, also have the potential to appreciate handsomely.

Over the past 15 years, top-caliber wine makers outside of France have emerged. World-class Italian wines come from Tuscany, the home of so-called Supertuscans such as Sassicaia, Solaia and Ornellaia, and Piedmont, a region in the north known for Barolo and Barbaresco wines. Supertuscans feature a blend of native sangiovese grapes and noble French varieties. The wines of Barolo and Barbaresco are usually made from a single red varietal, the nebbiolo grape.

But Europe doesn't have a monopoly on premier wines. One of the biggest names in the world is Penfolds Grange Hermitage of Australia.

And then there's California. If Bordeaux represents the wine market's blue chips, then California wines are akin to the technology-driven Nasdaq. During Silicon Valley's hey-day, a host of California boutique wines exploded onto the market. Wineries such as Harlan Estates, Colgin Cellars and Grace Family Vineyards gained reputations for being top notch, while producing just a few hundred cases a year. With these wines only available to members of the wineries' mailing lists, demand for the scarce bottles rocketed. In 2001, eight three-liter bottles of Screaming Eagle sold at auction for $650,000. While many of these cult wines haven't lost their flavor, they have fallen out of favor. Investors currently stick to California labels with longer track records, such as Opus 1, Caymus Special Select, Dominus and Ridge.

The Vintage Advantage
Not every wine from a top producer soars in price. The final piece of the puzzle is vintage, or the year the grapes were harvested. Weather conditions change annually, giving grapes grown in the same vineyard unique characteristics from year to year. That's why certain vintages turn out better than others, and some are simply extraordinary.

The 2000 vintage from Bordeaux has been relentlessly hyped, with oenophiles declaring it the best bottling in decades. These wines are being delivered now, and investors who bought futures back then have already seen prices appreciate between 40% and 100%. Sokolin, the wine merchant, says first-growth Bordeaux from the 2000 vintage currently sell for between $3,800 and $5,000 a case. He thinks the Margaux and Latour could reach $20,000 to $25,000 in 10 years, a 400% profit.

If the prices of first growths are too steep, Sokolin recommends a fifth growth, Chateau Lynch-Bages, which he says is the best-selling Bordeaux in the world. Those who bought futures have already seen the investment double. Sokolin is currently selling cases for $1,250, and says it could reach $3,000 in five years. He says the price should've already hit $1,600, but blamed price stagnation on Americans' boycott of French wines after the diplomatic flap between Washington and Paris over Iraq.

Stuart Randall, president of Bayfield Importing in New York, agrees that prices have leveled off, making it a good time to buy. According to Randall, now that the buzz surrounding the 2000 vintage has waned and early investors have locked in profits, prices will remain relatively reasonable until it comes closer to the time to drink the wines. Then, as corks get popped and imbibers boast of the taste, demand will again heat up.

"The ones who want them, have them," says Randall. "But more people will become wine collectors and want to chase Bordeaux. Even though they're overpriced, (2000s) won't lose any value. If you buy the 2000 Lafite today, you'll make money over the long term. People are calling it the best vintage of the century."

The flip side of the equation is that there've rarely been two great vintages in a row. So, with 2000 already highly valued, the 2001 vintage will almost certainly be a dud as an investment. However, Randall says investors who don't want to spring for the 2000 vintage might want to consider buying futures on 2002, which is being talked up. And coming on the heels of 2000, the first growths are priced much more reasonably.

If you feel you've missed the boat on Bordeaux, Ron Junge, the owner of Brown Derby Stores, is bullish on 2001 Californians. "The 2001's are outstanding," says Junge, "and could be a blockbuster reminiscent of '94 and '97, the two great vintages of the 1990s."