Investing? Choose wine over bonds, art: study

  • Prasun Sonwalkar, Hindustan Times, London
  • |
  • Updated: May 22, 2014 00:05 IST

Has vintage wine figured in your investment plans? If not, think again.

New research based on a huge dataset of 36,000 prices between 1899 and 2012 at the University of Cambridge suggests a real financial return on investment of 4.1%, compared to investment in art, stamps or government bonds.

Described as the ‘most comprehensive study of the price of wine’, experts at the Cambridge Judge Business School said on  Wednesday that the analysis revealed that wine prices outperformed government bonds, art and stamps, and remained consistently on a par with stock market returns, throughout the 20th century.

The study also found that great vintages rose quickly in value during the first couple of decades, while wines from mediocre or poor vintages caught up with the great ones after 50 years.

They found that keeping wine characteristics constant, wine prices have risen at an annualized rate of 2.9% in real GDP (gross domestic product) terms over the period 1900-2012.

The study found that maturing wines yield the highest returns: a collectible – but not necessarily drinkable – wine worth £100 ‘pays’ a non-financial dividend of £0.7 over a year.

 

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