Liv-ex reports that investing in fine wine 10 years ago would show no return
Liv-ex, the wine investment index, announced this week that investing in wine 10 years ago would have resulted in no profit. At the same time, those who invested in the 2018 vintage, were most likely to have made a loss.
Investing is a tricky business, where past performance is no indication of future wealth, and timing can be important. For example investing in fine wine back in September 2010 would have, on average, resulted in no profit. Investing 6 months later would have seen a loss of 20%.
Looking at the historical investment index, Liv-ex 100, the best time to invest in the last 10 years was just before the Brexit vote. If you had got your timing just right and correctly predicted that the UK would vote for Brexit (and realised this would cause the pound to drop in value by 20%), then you could have made a return of 20%. However, because of the cost of storing the wine it is likely that, for much of the last 10 years, investing in wine has not been profitable.