To good wealth: why wine could be a tempting alternative investment

Fine wine is less susceptible to changes in inflation than many other financial assets

People drinking wine

The return of inflation presents investors with a very real problem. In the UK, inflation reached 5.4% in December, its highest level for 30 years, and that rate is expected to accelerate over the months to come. Similar pressures are being felt in economies across Europe and in North America.

So how do investors protect their wealth from the erosion in value that inflation inevitably causes? For many investors, the answer is increasingly to turn to alternative assets such as fine wine. With interest rates stuck at historically low levels, and amid nervousness about the prospects for traditional assets such as shares and bonds, they are looking to reduce risk through diversification – to spread their bets. Research published by Connection Capital suggests more than two-thirds of high net-worth investors now dedicate more than 10% of their portfolios to alternative assets – with 30% expecting to increase such holdings.

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