It is often said that vines need tough love - that is, poor soil and baking sun. But nothing about making good wine is that simple or certain. Vines need sun and rain in the right amounts and at the right time.

Over the centuries, wine makers have resorted to science, magic and prayer to help the process along. The latest fashion is so-called biodynamism, where growers talk about the symbiosis between the Moon and the Earth, plan their work according to the positions of the stars and treat pests with homeopathetic remedies.

In spite of these efforts, experts say 2007 is so far turning out to be a very poor year for many wine makers. First, rain devastated the crop; then mildew and fungal parasites attacked. The result?

Scarcity may push up prices and quality is likely to be affected. It will be hard to judge the outcome until the wine is ready to drink in several years' time, viticulturalists say.

That should tell would-be investors just how hard it is to make money from wine. It is a commodity that is more palatable but of less use than oil. And it is expensive.

Experts agree that there is little chance of making good investment returns on cheap, unknown wines from makers of whom no one has heard. There are just 75 investment-grade wines, each selling at several hundred dollars a case.

Wine investment fund managers nonetheless argue that the market has all the right ingredients for a successful punt: strong and rising international demand and a finite supply. They also say that wine is not correlated to stock or bond markets and is therefore a good diversifier - it spreads risk in an investment portfolio.

Moreover, they say, the Liv-ex (London International Vintage Exchange) wine index, founded in 1999, has risen 45 per cent since the start of 2006, outperforming most stock markets, although it has dipped slightly in recent months. During times of stock market turmoil and economic uncertainty - like now - consumers tend to turn to alternative investments, from toys and antiques to wine, goes the pitch.

Nonetheless, it is telling that after a couple of years of strong buying by Asian investors, wine prices fell off a cliff in 1997 when Hong Kong's Hang Seng index dropped. Wine investors who bought at the peak are still nursing 25 per cent losses.

Alan Brown, chief investment officer at Schroders and well-known oenologist, says "the wine market lags stock markets for a year or two".

Wine is a small market, compared with the billions in equities and bonds. The market is therefore prone to spikes and is much affected by fashion, confidence and taste. Currently, it is being buoyed again by strong demand from Asia, particular from China for Chateau Lafite.

But Berry Brothers & Rudd, the wine merchant, warns that Valandraud, once the darling of the 1990s, has plummeted in the past few years. "Don't believe all the hype surrounding wine investment," Berry Bros says.

There are plenty of stories of wines such as 82 Le Pin rising from £350 a case to £18,000. "But such wines are not only very difficult to acquire, they are also extremely unrepresentative of the market as a whole."

Some investors are drawn into buying wine en primeur - before it is bottled - on the basis that wine becomes more desirable and therefore more valuable over time. But this, as the experts say, is like buying wine futures.

A less speculative strategy is to buy bottled wine that has been tasted by several accredited experts.

Serious investors need a minimum of £5,000-£10,000 to spend and must be prepared to wait for at least five years, and more likely 10, before they recoup their investment.

They also need to take into account the costs of investing, including the spread between the price at which they can buy wine and the price at which they sell it.

As Mr Brown, a self-confessed wine obsessive, says: "The trading costs are very high. There is at least a 10 per cent bid-offer spread. As an investment market it is very narrow."

There are further costs, too, including the costs of insurance, storage, duty and no dividends.

And only when investors uncork the bottle can they be sure it hasn't turned to vinegar or someone has not slipped in a fake.

Many vintners argue that private investors would save themselves a lot of grief if they thought of investing in wine as a way of funding their drinking habits: "sell half to drink half".

Another approach is to invest in one of the growing numbers of wine funds. These funds invest in a range of the best-known vintages.

For example, the Wine Investment Fund only buys wines from Bordeaux, which has a proven secondary market.

Most of these funds claim to have outperformed equity indices, but it is worth noting few have been around long enough to have much of a record.