Wine investing may be your tipple of choice

  • 08/10/2016 09:17 AM
  • Source: CNBC
  • by: Luke Graham
Wine investing may be your tipple of choice
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One reason wine can provide investors with a hedge is that prices have a very low correlation with mainstream asset classes such as equities, argues Justin Gibbs, director of fine wine marketplace Liv-ex.

Year-to-date, the Liv-ex Fine Wine 50 index, which tracks daily price movements of fine wines, has grown by 16.20 percent.

"In a downward market, the tangibility aspect of wine represents a store of value. Thus, when equities suffer in a recession, fine wine can be considered a safe haven," Gibbs told CNBC via email. 

"Also, the basic demand-supply equation applies. From the moment that the wine is bottled it begins to be consumed and supply gradually diminishes. Assuming that demand remains constant, this can have an upward effect on price."

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