The price and performance of wine

Because it’s nearly Christmas, and conexust1f.flywheelstaging.com will close down for the holidays, we thought this research piece was apt.

Elroy Dimson, Peter L. Rousseau, and Christophe Spaenjers, have looked at the impact of aging on wine prices and the performance of wine as a long-term investment, using a unique historical database for five long-established Bordeaux wines that they construct from auction and dealer prices.

The findings suggest that the non-financial “psychic return” to holding wines that are substantially beyond maturity is at least 1 per cent.

Using an arithmetic repeat-sales regression, the researchers estimate an annualised return to wine investments (net of insurance and storage costs) of 4.1 per cent between 1900 and 2012.

Wine underperforms equities over this period, but outperforms government bonds, art, and stamps. Wine and equity returns are positively correlated.

To access the research (open a bottle) and click here The price of wine