A Toast to Burgundy

iStock_000016005088XSmallLo and behold, it’s the fine Burgundy’s turn to share in the investment limelight and its investors are joining in the general euphoria resulting from the strong wine performances in 2013. According to the Liv-ex 100 index, the fine wine market has shown healthy gains in four consecutive months of this year and now stands at 8.7 percent higher than November 2012. A collector of market data, Cellar Watch is pinning much of that rise on renewed interest in Burgundy. Some of those top sellers were the Pape Clement 2010, which gained 45% in value and Pichon Baron 2004, whose value increased nearly 20%. On top of that, Bordeaux is still holding up its end of the market with gains of 6.8%. The race will be closely watched to see if Burgundy, which is enjoying prices that exceed £2,000 per bottle, can sustain its growth and keep up with the more traditional Bordeaux that is typically included in financial portfolios.

Trustworthy as a Stable Investment

Although the Baroness Rothschild would like to remind us that wine is intended for consumption, it has also shown itself to be a profitable investment. While it’s a fact that some wine collectors buy fancy vintage to show off their social status, this is nothing new. In fact, different grades of wine were matched with guests at Roman banquets and served according to their social status. Today, the majority of those who buy bottles or cases of wines from the best estates do so for investment purposes. They are usually bought through a wine merchant or fund and sent straight to professional storage centers. Investment in fine wine tends to stand steady even throughout recession and can add a safe diversification when mixed in with stocks and more traditional investments. Even with fluctuations in the market, a case of fine French wine that could have been picked up for £4,000 a few years back will now cost closer to £8,000.

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