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Saturday 25 October 2014

Fine wine hailed as 20th century winner

21st May, 2014 by Lauren Eads

Returns on fine Bordeaux wines outperformed government bonds, fine art and stamps throughout the 20th century, making it one of the soundest investments of the last 100 years.

FineWineCellarResearch carried out by a team of academics from the University of Cambridge, HEC Paris and Vanderbilt University, Nashville, Tennessee found that wine investors could expect a 4.1% return on their investment from 1900 to 2012, beating those of government bonds, fine art and stamps, as reported by Reuters. 

The only investment that fared better was in British equities, which would have given annualised returns of 5.2%.

Elroy Dimson, visiting professor at the Cambridge Judge Business School, told Reuters: “You would have done nowhere like as well as equities but the returns are surprisingly high compared to the returns on cash or bonds.

“Life is a little unfair and wealthy people who buy these assets – in this case wine – if they keep half to drink and sell half, maybe the half they sell could pay for the half they drink.”

The research focused on data from 36,271 transactions for five red Bordeaux wines – Haut-Brion, Lafite-Rothschild, Latour, Margaux, and Mouton-Rothschild – from the sales rooms of Christie’s auctioneers and wine merchant Berry Bros. & Rudd.

Annualised real returns over the same period on British government bonds were 1.5%, 2.4% on art and 2.8% on stamps, according to the study’s data.

While fine wine is currently riding high, Dimson said his tip was to watch out for whisky, hinting that “fine whisky may be the coming thing”.

 

One Response to “Fine wine hailed as 20th century winner”

  1. Simon says:

    This is nonsense!
    Wine pays no dividend but has to be bought and sold to release any gain. The investor has to make decisions as to when to buy and/or sell. These decisions are not statistically measureable. Furthermore being a wasting asset many buy/sell decisiions have to be made over 100 years unlike art or stamps the quality of which does not change over time.

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