Practical Applications of The Diversification Benefit of Actual Investing in Fine Wine
| Autor: | Thomas Nahmer |
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| Rok vydání: | 2020 |
| Předmět: | |
| Zdroj: | The Journal of Alternative Investments. 22:1.5-4 |
| ISSN: | 2168-8435 1520-3255 |
| DOI: | 10.3905/jai.22.s3.026 |
| Popis: | Practical Applications In The Diversification Benefit of Actual Investing in Fine Wine, from the Spring 2020 issue of The Journal of Alternative Investments, author Thomas Nahmer of Georg August University investigates whether wine can be a suitable investment vehicle for diversifying a traditional portfolio of stocks and bonds. Previous studies that examined only market indexes have found that wine posts high investment returns and that its prices do not fluctuate in tandem with stock and bond prices—leading researchers to conclude that allocating to wine can effectively diversify a portfolio. However, other studies that focused on the details of actually investing in wine have found that wine’s high costs, plus issues of liquidity, significantly reduce its investment returns. Nahmer examined whether investing 10% of a portfolio in fine wine could improve returns and lower overall risk. He found that investing in wine reduces net portfolio returns, increases risk, and decreases risk-adjusted returns after accounting for costs. He therefore concludes that fine wine provides no diversification benefits. |
| Databáze: | OpenAIRE |
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