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Wine investment outpaces stocks and shares
Fine wine has been the best performer of all major investment assets since 1988, according to research published this week by wine investment company Vin-X.
Fine Wine has performed better than the Dow Jones and the FTSE 100 (Photo: Wiki)
The report, written by Martin Pruszynski, Vin-X’s head of procurement, underlines how fine wine investment has been the best overall performer when total growth across major asset classes since 1988 is considered.
In that time Fine Wine has appreciated 1474%, nearly twice as much as its nearest rival, the Dow Jones (up 783%). The S&P comes in third with 744% and Property fourth with 312%. Although on a roll since the very late 1990s, the average price of a house in the UK only rose by 17% in that decade.
The FTSE 100 is fifth with 306%, well ahead of Gold with 162%. Gold, despite its rampaging bull run from 2000 to 2011, suffered from a major bear run from 1980 to 2000.
Dividends have not been included in the stock indices’ calculations as it is impossible to know for data purposes if they were spent, re-invested or just not paid.
Pruszynski points to the fact that, while Fine Wine is coming out of a difficult time since 2011, it has experienced only three five-year negative holds in the period in question, with no negative ten-year holds.
Tellingly, the worst performance seen for a ten-year hold in Wine (over what is nearly 30 years) is double the average and median inflation rates in the UK.
Sadly as I only ‘got on board’ in 2011 my performance does not enjoy your heady numbers. These indices always depend on the year picked to be base year.
I look froward to the surge needed in the next 5 years to get the ten year uplift to the top of the comparisons
Sincerely
Frank Eliel
It also depends a lot on the wines you invested in as well as on the equilibrium of your portfolio. In the case of the 2011 in Bordeaux, that we specialize in, it was very important to mix established wines with rising stars. The first ones would pull your portfolio but with little ROI because of their high purchase prices and the latter would boost it because of their high potential and growing demand. To boot it also depends a lot on when you bought your 2011. If you invested in 2011 “deliverable” as opposite to “en Primeurs” you reduced also your chances of optimizing your ROI. But to buy En Primeurs you need to get allowances and therefore need to be well established in the Bordeaux wine. Finally, I would say that for 2011 the wine merchants needed cash to maintain their 2014 En Primeurs allowances, so, to get it, they put on the market their 2011 at “bargain” prices. That’s to me anyway maybe one of the reasons why your portfolio does not show the same figures as mentioned in the article. However, as you wisely said, in 5 years times things might have completely changed.
Yet more desperate talking up of the wine investment market. To leave dividends from equities out of the equation is both lazy and nonsense. The dividend yield from each index is available and once this is included equities outperform wine. But what is interesting is the repeated mantra of talking up wine investment every year even though prices and the market continue to decline. The fact is the market will continue to fall or flatline for a long time yet. So, forget about investing in wine. The only people that gain financially are the people that promote wine investing. Don’t be fooled by them, and don’t waste your money in the fools gold of wine investment.
I have never read such rubbish and inaccurate claims as this. What nonsense!