Top Wines as an Asset Class handily Out-perform Gold, Oil and Equities

"Drinking fancy wine is so last decade. In today's speculative markets, produce from the world's great chateaux is leaving other "hard" assets in the dust. London's Liv-Ex fine wine exchange's index of top 50 wines rose 57% for 2010. That easily outperformed gold's 29.8% rise, converted to U.K. pounds to be on an equivalent basis with Liv-Ex's index, or oil's 15.1% increase, also converted to pounds. As for equities, the FTSE 100, for instance, was up just 9%.

Liv-Ex attributes the price surge to heavy demand from—you guessed it—China, as well as some other Asian countries. Given extreme supply constraints and a surge in the world's megarich, the fine wine 50 index is up 269% over five years.

If the market turns, investors mightn't find the asset as liquid as they would like. But, for now, the lesson seems to be that those wanting to make some greenbacks should target reds or whites."

Source: OVERHEARD on the Wall Street Journal Online, Thursday January 6

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