Meanwhile, the Sotheby’s Burgundy Market has significantly outperformed the S&P 500 since 2007 while the Sotheby’s Bordeaux Market index outperformed the S&P 500 from 2005-2019. Sotheby’s Wine Index has consistently outperformed the S&P 500 since 2005, with performance converging only briefly in 2021. When dividends were reinvested, the S&P 500 outperformed Liv-ex by 60% over the same period. The Liv-ex Fine Wine 100 has risen by 270.7% over the two decades spanning July 2001 to July 2021, outperforming the S&P 500 by 8 percentage points over the same period, though only when you consider the index’s performance without dividends reinvested. stock performance, the London International Vintners Exchange-commonly known as the Liv-ex-is the benchmark for the fine wine market.
Much like the S&P 500 is the benchmark index for U.S. Wine vs Stock: Which Is a Better Investment? Because these factors are unrelated to the overall stock market, wine investments can complement a traditional portfolio. The value of wine responds to factors such as weather patterns, harvest yields, vintage and consumer trends, all of which together intersect with supply and demand. Wine offers a unique source of diversification because its value is based on factors that have little relation to the performance of the economy, interest rates, corporate earnings or conventional investor sentiment. You’ve probably heard the experts repeatedly stress the importance of diversification. Stocks and bonds go through familiar cycles of boom and bust, but collectables like fine wine deliver investment returns with little to no correlation to traditional assets-they may even be negatively correlated with the stock market. Like any other alternative investment, buying wine can provide your portfolio with an excellent source of diversification.
Here’s everything you need to know to invest in wine, even if you don’t have a wine cellar-yet.
#Fine wines and spirits how to#
But you may also be able to turn a profit on a nice bottle of Cabernet or Sauvignon Blanc, if you know how to pick them. For most people, investing means buying stocks, bonds and funds.
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