DIVERSIFY TO PROTECT WEALTH AGAINST INCREASING FINANCIAL MARKET VOLATILITY

Peter ShakeshaftThis week we have seen global financial markets suffer a seismic wave triggered in the US which saw the Dow plunge 1200 points (4.6%) on Monday 5th February, catalysing losses in Asia and Europe. Financial market commentators have been foretelling a pending correction for some time now following a prolonged period of market growth led by the US.

Higher than expected US wage growth was reported last week compounding concerns over the impact of Trump’s tax cuts and a weakening dollar, leading analysts to revise previous forecasts on potential interest rate growth.

As a result, FTSE 100 closed down 200 points (2.6%), Dax down 2.3% and CAC 2.4% on the 6th February. When compared with overall growth across last year these are significant movements down; FTSE’s loss this week was nearly a third of the total 7.6% growth across 2017.

Liv Ex 1000 index: 10 years (chart)

We have to point again to fine wine’s stable performance in times of uncertainty and financial market volatility. Liv-ex, fine wine’s stock market equivalent, has reported that its broadest indicator, the Liv-ex 1000 saw 0.2% growth in January 2018 and 9.89% in the 12 months to 31st January 2018. FTSE 100’s total growth over 2017 was 7.6%, whereas the Liv-ex 1000 saw 10.2% growth across 2017.

The value of portfolio diversification is realised in times of economic uncertainty and resultant increased volatility in financial markets. Fine wine’s stable long term growth performance offers distinct benefits to optimise performance. It was even noted on BBC Radio 2’s Jeremy Vine show yesterday that fine wine has outperformed financial markets.

For more information contact the team on 0203 384 2262,

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