AAA Highlights Outperformance Of Wine Over Equities In October
Alternative Asset Analysis (AAA) has highlighted the fact that wine was the best performing asset in October in the United Kingdom, as a further indication of the benefits of alternative investments.
Online, November 30, 2011 (Newswire.com) - Alternative Asset Analysis (AAA) has highlighted the fact that wine was the best performing asset in October, as a further indication of the benefits of investing in alternatives.
In October, the FTSE 100 index lost eight per cent, while a 9.5 per cent fall was recorded on the Dow Jones. It was undoubtedly a tough period for investors, with even assets like gold, which had seen such huge gains earlier in the year, losing several percentage points during the month. However, the smallest losses were suffered by those with investments in fine wine, which only saw losses of 4.3 per cent.
Anthony Johnson, an analysis partner at alternative investment advocacy group, AAA, commented on the figures: "Although October was pretty rotten for investors in general, it seemed that the more alternative investments you have, the less you were hit."
AAA claims that this is due to the fact that alternative asset classes, such as wine, art, antiques, real estate, gold and forestry, are not as closely aligned to the general state of the economy, so can be extremely effective at diversifying a portfolio against risk.
The value of fine wine has grown by around 60 per cent over the past two years, although some predict that there could be some adjustments to the market that are causing the recent slowdown. Will Beck of the Fine Wine fund, for example, told The Telegraph, "The fine wine market enjoyed almost two years of unchecked growth from the summer of 2009 to that of 2011, rising by around 60 per cent. It would not be difficult to argue that some kind of correction was due."
AAA is keen to promote alternative investments and said that if wine isn't attractive, maybe forestry investment is a more dependable option, as it still offers a significant diversification opportunity. Firms like Greenwood Management, which managed plantations of non-native trees in Brazil, offer investors the chance to try out alternatives for investments of as little £10,000. "Forestry has outperformed equities on average for the past decade," added Mr Johnson.
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