Investment in Wine

Abstract

After 2007-2009 market shocks an investor cannot fully rely on financial asset market and, to diversify his portfolio, tends to choose the alternative investments. This work aims to test the hypothesis if the investments in fine wine can be considered as alternative investments. Also provides the evaluation of risks and returns flowing from this asset. Fine wine market is small, there are no instruments for prediction of its development and an investor must rely on constructing trends from foregoing data. Historical data are used in this research as well. The hypothesis is tested by series of calculations as well as risk and return evaluation. Also the issue of fine wine investments is then discussed with two specialists from investment in fine wine area. The research came to the conclusion that wine definitely creates an alternative asset class, however there are differences in risks and returns among individual types of fine wines. The most profitable ones are Champagne and red Bordeaux from 24 largest producers, nevertheless these ones are also the riskiest.