Fine wine has proved to be a more profitable and more stable investment than equities during this year. Despite of the volatility of the 2018 market, wine has escaped any violent fluctuations in trading price or demand. Investors who took part in the wine market were able to stabilize their portfolios thanks to this.
The financial sector can be quite difficult to navigate and to participate in, especially if you aren’t trained in finance. Despite this, it’s still a good idea to invest your money in some markets in order to grow it. If stocks are too confusing for you, then tangible investments like wine might be a viable option as well.
According to Liv-ex indices (the tracking of wine prices, demand, and movement), 2018 was a good year for wine. Liv-ex 100 is the benchmark for the industry, and it represents the price fluctuation of 100 of the most sought-after fine wines. This past year, price movement remained within a 2% range despite the volatility of the rest of the financial market. While it only had a modest growth of 0.22% in 2018, the Liv-1000 rose to 10.24%. This index tracks price movement of 1,000 wines and includes the other smaller indices. This spike comes from the extraordinary performance of Burgundy wines in 2018: Armand Rousseau appreciating 42.7% and Domaine de la Romanée-Conti (DRC) by 33.5%.
This year also marked the highest price a wine was sold at during an auction. In October, a 1945 bottle of DRC was sold in Sotheby’s for $558,000 USD, and another for $496,000 USD. The sale was further proof that the wine market is stronger than ever, and investors should rest easy (at least for now) because their investments proved to remain profitable. While the record for an alcohol bottle is still held by a bottle of scotch ($969,445 USD for a 1926 Macallan), the record was set for wine lovers around the world.
Investors in fine wines were quite pleased with these developments because not only did it stabilize their investment portfolios, but also increase profits. With this trend, we could see more investors taking part in other tangible investment markets: gold, art, real estate, etc. Of course, these wines are not the bottles you open at the end of a stressful work day—to do so would lose you a lot of money!