Investors look to wine and art, says AAA

Alternative Asset Analysis (AAA) has commented on news that investors are turning to some highly unusual assets in response to a prolonged period of stock market volatility.

The alternative investment advocacy group welcomed the report from thisismoney.co.uk that examined the growing trend for investment in assets like fine wines, stamps, collectibles, books, antiques and art.

Anthony Johnson, an analysis partner at AAA, said, “This is a reflection of the fact that people are on the look out for a place to put their cash that will ensure it won't disappear if the bottom falls out of the equity markets.

“Diversification is a key request for both individual and institutional investors looking to reduce risk these days and these more unusual assets are proving more affordable than more ‘traditional’ alternatives, such as gold,” he added.

The art world claims it has benefited hugely from the trend for more investment in alternatives, with the market for individual pieces reaching record levels, while art funds also go from strength to strength. However, minimum investments for some of the most popular art funds tend to be expensive – often starting at tens of thousands of dollars. Cheaper alternatives include wine, which can offer an attractive prospect, with cases of fine wines and top vintages available for as little as $1,600. Data from Morningstar show that $32,600 invested in fine wine in 2005 would be worth $114,200 today. This compares very keenly to the stock markets, where the rate of return for the same period would have averaged at just 2.9 per cent.

“Figures like this show that alternatives are a valid money-making option in today’s economic climate – and the more volatile the stock markets become, the higher the values of these alternative assets will climb,” added Mr Johnson.

AAA supports all alternative investments, but is especially keen to focus on encouraging investment in emerging markets through impact investing or investing in forestry and other ecologically and socially responsible asset classes. “Investment in forestry through firms like Greenwood Management, which operates in Brazil, help to bring foreign investment to emerging economies and helps to safeguard the forestry industry for future generations," said Mr Johnson.

About Alternative Asset Analysis:
The remit of Alternative Asset Analysis is to analyse and provide news on the global performance of a wide range of alternative asset classes including, but not restricted to, commodities, real estate, forestry, foreign exchange, hedge funds, private equity and venture capital.

Contact:
Anthony Johnson
Alternative Asset Analysis
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Boston, MA 02109-1320
617-939-9596