The diversification that investment fine wine provides to investors should be seen as its most appealing aspect, alongside the great medium term returns. As a “passion asset”, the demand that it is subject to comes from avenues that extend beyond purely financial concerns. There will always be collectors and there will always be those who are looking to buy to consume. This degree of separation from the traditional equity markets is an extremely attractive attribute for an asset to have whenever global markets are in periods of volatility, and doubly so during times of severe crisis, such as the current pandemic.
The economic fallout of Covid-19 will clearly be felt well into 2021 and beyond, and the hospitality industry is already suffering greatly. Demand is likely to be affected and thus so will prices. The yearly, in-person tastings in Bordeaux and Burgundy were cancelled amid safety concerns and experts are already predicting that this will have short-term impact at the very least. However, 2020 has seen gains in wine from a number of other regions, such as Italy and Champagne. It seems that the losses predicted form the big two of Bordeaux and Burgundy could, in fact, be a trend that is mostly internal to the wine markets itself and that there are still gains to be made with the asset as a whole. What is clear is that, whatever happens, a keen eye for a stable asset such as fine wine could provide investors with a great opportunity in the face of major economic uncertainty through 2020-2021.