Those looking to invest would do well to have a look at investment options beyond the obvious stocks and shares. Wine investment is one particular market that is currently growing steadily and significantly outperforming the FTSE.
Indeed, despite the recession, the wine investment market has grown at a staggering rate, shattering all previous records of its own value. This growth is primarily fuelled by expansion of the market in Asia. The market is currently up 166% over the last five years, compared to 16% for the FTSE 100.
The growing demand from previously untapped markets is incredible and certainly goes a long way to explaining how wine investment has managed to grow steadily throughout a recession – western economies were affected much more than so called emerging markets in the Far East, Asia, Latin America and Russia, all of which are fuelling demand for fine wine.
The Chinese figures alone are simply amazing. Between 2005 and 2008, wine consumption in China grew 65% catapulting China to be the sixth largest wine consumer in the world and totalling a full 10% of the international wine market. Experts predict that Chinese consumption is set to rise a further 31% by the end of 2011. For a market that previously imported amounts that can only be politely described as negligible, this is astonishing.
When you taken into consideration that fine wine will almost always appreciate in value with age as it becomes more drinkable, this rise in demand will only further fuel prices to staggering levels, as fine wine is always produced in limited amounts at the very least meaning demand is rising against a fixed supply, which then diminishes as the wine is drunk.
Taking all that into account, it looks like wine is a very good investment indeed.
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