Prof. Dimson: "New research reveals that wine outperformed art, stamps and bonds throughout the 20th century"

From the Judge Business School, Cambridge, UK, 20 May 2014 :

Canny investors who have so far left wine out of their portfolio may want to think again

Canny investors who have so far left wine out of their portfolio may want to think again after the most comprehensive study of the price of wine to date revealed that wine prices outperformed government bonds, art and stamps, and remained consistently on a par with stock market returns, throughout the 20th century.

Using a huge dataset of 36,000 prices between 1899 and 2012 from Christie’s and Berry Bros, a real financial return on investment of 4.1 per cent emerges from the study co-authored by Professor Elroy Dimson of the University of Cambridge Judge Business School and London Business School.
The study also found that great vintages rose quickly in value during the first couple of decades, while wines from mediocre or poor vintages caught up with the great ones after 50 years.

The Price of Wine, by Dimson, Peter L. Rousseau (Vanderbilt University), and Christophe Spaenjers (HEC Paris) makes a unique contribution to the study of the economics of wine, built on a novel historical database of prices for five Premiers Crus Bordeaux that have consistently ranked among the most frequently-traded in the world – Haut-Brion, Lafite-Rothschild, Latour, Margaux, and Mouton-Rothschild.

The trio examined 36,271 prices for over 9492 combinations of sale year, chateau, vintage and transaction type (dealer or auction) between 1899 and 2012 to investigate the returns on holding wine and the effects of aging on wine prices. They found that keeping wine characteristics constant, wine prices have risen at an annualized rate of 2.9 per cent in real GBP terms over the period 1900-2012. Young high-quality wines, that are still maturing, provided the highest financial return, while famous wines delivered a quantifiable psychic dividend to owners.

Annualised real returns over the period 1900–2012 were 2.4 per cent, 2.8 per cent, 5.2 percent, for art, stamps and equities respectively. Wine not only outperformed government bonds, but also art and stamps, even when ignoring the costs associated with investments in those types of collectibles, and only underperformed equities....MORE

HT: the CFA Institute blog:
Varietals for the Long Run? Wine Investments May Outperform Artwork and Bonds

Previously:
Dimson et al: "The impact of aging on wine prices and the performance of wine as a long-term investment"
Are collectibles good long-term investments? "The Investment Performance of Emotional Assets"
Alternative Investments With Liquidity: "Fine Wines, Best Value"