Market Performance

Market PerformanceFew things are lovelier than popping the cork of a prized, respected vintage wine. That’s a given. But aside from these pleasurable moments, investing in wine can be a smart, savvy approach to diversifying a solid financial portfolio. Wine has offered a consistently high return to its investors over the years, especially over the last 15+ years which represents a more than 13% annual gain.

Demand is at the heart of wine’s market performance. The main driver for global wine growth is the specific demand from emerging markets dominated by the newly wealthy.

For example, wine consumption in China has grown by approximately 170%; Russian consumption by over 80%; and South Korean consumption by over 75%. The primary driver is the investor from China or Hong Kong, particularly since the 2008 abolition of all import duties in Hong Kong.

With a growing demand for fine wines coupled with a fixed production and supply, the market appears poised for continuous increases in price. Cherished vintages will become more and more scarce as they are consumed, thus creating an organically positioned environment for price appreciation – one of the characteristics so unique to wine as an asset class.
Investors are now convinced that fine wines have potential for stable, long-term returns which can only enhance a multi-faceted portfolio. Its volatility, when compared to the equity and commodity markets, is minimal at 8.1%, whereas the Dow Jones exhibited 15% volatility – nearly double. Wine poses less fluctuations and much more resilience, underlining its long-term durability as a first class investment.

Average First Growth Movements

If you are ready and willing to take the next step, Westgarth Wines is here to recommend the best and most financially sound wine investments for optimal portfolio returns.

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