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With stock and bond markets looking so glum, maybe it's time to stock up on wine.

No, not for drinking. For investment.

Wine, art and musical investments have offered better returns than cash or government bonds since 1900, according to the most recent edition of the Credit Suisse Global Investment Returns Yearbook. On the other hand, housing – the favoured investment of most Canadians – looks like an outright dog.

The 2018 yearbook, published by the Credit Suisse Research Institute in collaboration with Elroy Dimson, Paul Marsh and Mike Staunton, a renowned team of professors at London Business School, offers an extensive look at these non-financial assets. It makes for fascinating reading on this side of the Atlantic, because Canadians are estimated to hold nearly half their net wealth in such assets, most of it in real estate.

Some of the yearbook's most intriguing findings have to do with "investments of passion" or "treasure assets." These are typically beautiful collectibles that don't generate any cash flow, except when they're sold. They're usually pursued for aesthetic or emotional reasons.

The researchers could track only four of these assets – wine, art, stamps and violins – all the way back to 1900. Of those four, wine provided the best return, with an after-inflation gain of 3.7 per cent a year on average over the past 118 years, while art did the worst, with price appreciation of only 1.9 per cent a year.

On average, the real returns from those treasure assets surpassed the real returns on a portfolio of global bonds, although they fell short of the 5.2-per-cent total return achieved by a global portfolio of stocks. Still, that's not bad for a group of assets that also delivers an emotional wallop for dedicated collectors. No matter how much you may love your stock, it doesn't deliver the same jolt as a cellar full of fine wine or a house packed with art you love.

Surprisingly, though, other types of treasure weren't so good at delivering value. Gold, silver and gemstones proved to be lousy hedges against inflation and produced returns lower than simply holding U.S. Treasury bills, according to the researchers.

Real estate was also a lacklustre investment, the professors say. By their calculations, the real capital gain on worldwide housing since 1900 has actually been slightly negative – an annual average loss of 2 per cent, to be precise – once gains in home prices are adjusted to reflect the cost of upkeep and differences in quality between older homes and newer construction.

This finding is contentious since other studies have recently produced far more positive results. But what the yearbook and others agree on is that home prices don't rise at a constant rate. For the first part of the 20th century, they barely budged. It was only after 1950 that they began to rise, but most of the gains took place from the mid-1990s onward.

Of course, in some countries, the increases ended abruptly with the global financial crisis in 2008. In the United States, for instance, house prices fell by more than 36 per cent in real terms between 2005 and 2012.

So should you sell your house, your gold and your bonds, and buy wine instead? Probably not. The professors take great pains to point out that long-run historical patterns may not persist over shorter periods. It's important to consider each type of collectible separately and realize they can produce wildly volatile results. Over the past couple of decades, for instance, historic cars have produced huge returns for collectors. In contrast, rare books have fizzled.

If you want to bet big on any of these long-run findings, it may be the superiority of stocks as a wealth generator. The authors of the yearbook found that stocks produced the best returns of any asset since 1900, beating Treasury bills by 4.3 per cent a year on average, and they expect that advantage to continue, although in reduced form.

Starting from today, a global equity portfolio is likely to outperform cash by about 3.5 per cent a year over the long haul, they estimate. If history is any guide, stocks will also beat other assets as well, including housing and collectibles. Sadly, it still looks as if the best idea is to use the profits from your stocks to buy your wine, rather than the other way around.