During times of economic uncertainty there are always winners and losers. Rather than batting down the hatches and waiting for the COVID storm to pass, the more experienced investor will look at diversifying away from the mainstream financial markets in order to achieve healthy returns with increased stability. The defensibility of the wine market is what is so attractive to investors right now. The fine wine industry is not correlated to financial markets nor is it dictated by any single economy, the strict supply and demand rules of this market allow the value of wine to consistently appreciate as the supply gradually starts to decline.
Since 1988, when reliable data was first collected, the wine market has shown averaged returns of 12.4% p.a. As portrayed by the graph below, the market has consistently appreciated in value over time.
If you had invested £100 in the fine wine market in 1952, your investment would now be worth £420,000. On the other hand, £100 invested in the stock market would now be worth a modest £100,000. Recent research shows that, thanks to this impressive track record, the majority of financial advisors would support investing in fine wine as a way to diversify certain client portfolios.