When it comes to investment, wine, art and cars have often been regarded as ‘pleasurable’ assets. Common perceptions exist that these tangible assets, often put under the same roof, simply serve to diversify a portfolio; they are safe yet less liquid, and if worse comes to worst, can always be enjoyed.
The notable distinctions between them, however, are rarely acknowledged. In an article published last year under the title ‘The Best Investments of 2018? Art, Wine and Cars,’ the Wall Street Journal commented: “Who beat the market this year? Investors who like the finer things in life.” Financial newswires occasionally report on the performance of these alternatives through published indices, commonly citing Liv-ex with regards to fine wine and Sotheby’s Mei Moses when art is concerned.
But fine wine as an alternative asset class is not so like art and classic cars—it is easier to value accurately. The price of classic cars, for instance, is often determined by their history, prestige, condition, original features, awards and popularity: a car once driven by someone famous or with an interesting history might demand a higher price. Indices that track the classic car market are often based on auction sale results, such as the K500.
Readers should take note that the views of this author represent those of a company with an interest in the wine trade. Liv-ex operates the global marketplace for the wine trade. They have over 440 members from start-ups to established merchants and supply them with the data, trading and logistics services they need to price, source and sell wine more efficiently. Private collectors can view Liv-ex prices and value their portfolios using Cellar Watch and find regular market analysis on the blog. The opinions of Liv-ex are their own and do not represent those of Robert Parker Wine Advocate or Wine Journal. Liv-ex contributes articles to Wine Journal that we feel are of market relevance to readers, but we do not specifically endorse this company.
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Trade by both value and volume dipped slightly this week. Bordeaux (59.5%), Burgundy (22.3%), Champagne (6.1%) and the USA (4.2%) all gained market share. Trade in Bordeaux was led by the 2009 and 2010 vintages, while that in Burgundy by the more recent 2017 and 2016....