
Wine Basics
Wine Investing
Apr 24, 2025
Does Fine Wine Offer Downside Protection?
In times of economic uncertainty, investors often seek refuge in assets known for their stability and resilience. While gold and other traditional safe haven assets have long been favoured in this regard, fine wine has emerged as a viable alternative. Below is a list of reasons why.

Source: Pricing data from Liv-ex as of 11th January 2023
Tangible Value Amidst Market Turbulence
Like gold, fine wine possesses intrinsic value that transcends market fluctuations. While stocks and bonds are subject to the whims of economic indicators and investor sentiment, the value of wine remains anchored in its rarity and desirability. Regardless of broader market conditions, the allure of well-aged vintages persists, providing investors with a tangible asset that retains its worth over time.
Diversification Benefits
Diversification is a cornerstone of effective risk management in investment portfolios. Fine wine offers a unique avenue for diversification, as its performance tends to exhibit low correlation with traditional financial assets. During periods of market downturns, the resilience of wine prices can serve as a stabilizing force, offsetting losses incurred in other areas of the portfolio.
Limited Supply and Growing Demand
The scarcity of fine wine, coupled with increasing global demand, underpins its role as a safe haven asset. Just as the finite supply of gold contributes to its enduring value, the limited production of top-quality wines reinforces their status as coveted assets. As economic uncertainty mounts, demand for tangible luxuries like fine wine often intensifies, bolstering prices and providing downside protection for investors.
Historical Performance
Studies have shown that fine wine has exhibited resilience during periods of economic downturns, with prices holding steady or even experiencing appreciation. This track record of stability further cements wine’s reputation as a reliable hedge against market volatility.
Our research has shown that Fine Wine exhibits volatility below that of gold, and commodities which have been traditionally seen as safe haven assets.
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When is the Best Time to Invest in Fine Wine?
The fine wine market has always been a blend of passion and performance. For some, the allure lies in the artistry of the vineyard; for others, it’s the steady, tangible returns that make fine wine a compelling alternative asset.
But here’s the perennial question for investors: when is the right time to invest?
In our latest analysis at WineFi, we examined one of the most sought-after segments of the market—red Burgundy—to see how timing influences returns. We compared all red Burgundy wines in our investment universe to the Liv-ex Burgundy 150 index, the sector’s benchmark, and looked for patterns that could guide smarter entry and exit strategies.
The Findings at a Glance
Our data paints a clear picture of how red Burgundy performs at different stages of its lifecycle:

🚫 Don’t buy on release – On average, red Burgundy underperforms its benchmark in the first few years after release. That means paying top prices straight out of the gate often isn’t the best move for returns-focused investors.
🎯 Sweet spot: Year 6 – Performance begins to accelerate around the sixth year—coinciding with the median start of the wine’s drinking window. From here, returns tend to outpace the benchmark.
📈 Outperformance window: Years 6–25 – During this period, red Burgundy has historically delivered impressive relative gains. By year 25, the mean return in our dataset was 1.8x higher than the benchmark.
⚠️ After year 25: A trickier game – Performance tends to plateau, and volatility increases. As bottles become rarer and more valuable, prices can swing sharply in either direction. This aligns with the median end of red Burgundy’s drinking window, when investment and consumption dynamics shift.
Why This Matters for Investors
Fine wine, unlike many asset classes, is both finite and consumable. Every bottle opened reduces supply, creating scarcity—but also introducing unpredictability as remaining stock becomes fragmented across cellars worldwide.
By aligning purchases with a wine’s drinking window, investors can:
Maximise potential upside by entering when market demand is strengthening.
Reduce downside risk by avoiding the softer performance often seen in the early years.
Plan exits strategically before volatility overtakes predictable growth.
The Limits (and Power) of the Data
While this study looks at the mean performance of all red Burgundy wines in our universe, individual results will vary significantly by producer, vintage, and even format (bottle size). Legendary producers like Domaine de la Romanée-Conti may defy these trends altogether, while lesser-known estates might follow them more closely.
Still, using drinking windows as a timing tool offers a practical framework for making better-informed decisions—especially for investors building diversified portfolios across regions and styles.
Final Pour
The data tells us that patience pays in fine wine investment—particularly in Burgundy. If you can resist the urge to buy on release and instead enter around year six, history suggests you’ll be swimming with the current rather than against it.
In fine wine, as in life, timing is everything. And for Burgundy lovers, that sixth-year mark might just be the moment when the stars—and the corks—align.