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LIVE opportunities: Fine wine vs inflation

  • US CPI hit 4.2% in April, rising 0.8% MOM.
  • Liv-ex Fine Wine 100 and Bordeaux 500 continue to prove wine as an ‘inflation buster’.

The US Consumer Price Index (CPI) hit 4.2% in April, with a 0.8% rise month on month, leading to a scare on the DOW Jones, which has dipped sharply with the news.

The FTSE trended downwards following the news as well – the UK CPI is expected to be published Wednesday of next week.

Rising inflation can have a corrosive effect on wealth over time, lowering buying power. Equities and the housing market are traditional investments to help counter inflation.

As can be seen from the chart, since 2003 both the UK housing market and FTSE 100 have performed well, rising above inflation – though not without considerable volatility in the latter.

Wine, art and stamps, however, have long been advocated as alternative ‘passion’ investments that can help further alleviate the impact of inflation.

Looking at the performance of the Bordeaux 500 and Liv-ex Fine Wine 100 since 2003 versus the more traditional equities, it would appear that fine wine continues to be a good use of one’s cash.

Opportunities: Buy again