I just finished reading an article that leads with the headline “investing in high end collectible wine beats stocks” regardless of the economy.  The summary article was published in a very well respected wine journal.  The study, conducted by two PhD candidates from the University of Fribourg, is an update of the original first published prior to the recent recession and concludes that investing in investment grade, auction worthy wine, improves on financial returns while reducing risk.  The time interval used covered two bull and two bear markets back to 1996.  At first, I felt uneasy about the concept.  While I enjoy my fair share of nice wine, my philosophy has always been to enjoy the wine, even at the high end of the spectrum.  Somehow, I never thought of it as a part of my investment portfolio.  Nonetheless, the concept does deserve consideration.

First off, let’s define the term investment.  Webster’s dictionary offers two definitions.  The first is “an outlay of money…….for income or profit ” while a second is “ to make use of future benefits or advantages.”  The study described above clearly was referring to the first definition, suggesting that it should add financial returns to your portfolio.  So let me address this first.