Wine: it's for drinking, not investing in

Keeping wine can make an excellent hobby. But as an investment idea, it's an expensive, illiquid non-starter.

There is nothing like fear to get the experts over-hyping their products. And so it is with the wine market. A couple of recent examples. "The financial world is melting down, but it has not been affecting the high-end wine market," says Sergio Esposito, director of the Bottled Asset Fund in the Financial Times."Fine wine is easy to understand. It's a tangible investment, which tends to go steadily up in value," says Joss Fowler of wine merchant Berry Bros & Rudd in The Daily Telegraph. Both these comments, true as they might be, seem to remind us of something. What? The comments coming from the many interested parties in the property market last year. Remember when you couldn't lose with bricks and mortar, what with property being an easy to understand and tangible investment?And when, thanks to the endless supply of rich idiots in the UK, the price of prime London property would never fall? Quite.

Last year the Liv-Ex Fine Wine Index returned 42.2%. And last week The Daily Telegraph reported that, "the wine industry is celebrating one of its best weeks ever", with Berry Bros & Rudd on its way to record the best sales year in its 310-year history. We guess it's going to be the best sales year for some time to come. Liv-Ex Fine Wine Index's growth rate slowed to 9% in the first half of the year and there's no reason to think it won't keep slowing, given that the world's biggest wine buyers the financial community aren't going to be in quite the buying mood this Christmas as they were last year.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.