At the start of a new era: the day we see our second female prime minister appointed by the Queen and tasked by the people to be the architect of a new way of doing business with Europe, the fine wine investor has a reason to raise a glass.
The historic referendum result just three weeks ago sent shock waves through our democratic system, the seismic effects of which have seen Theresa May appointed to lead us through the most challenging economic and political landscape the UK has faced for generations and a Labour Party in the process of tearing itself apart.
Sterling’s downward plunge has had the brakes applied by a pro-active Mark Carney and equity markets have endured a roller-coaster ride Alton Towers would be proud of! After the initial sell-off the FTSE has now added 5% to its pre-Brexit close and in the US the SP500 and Dow Jones have both hit new all-time highs in spite of the $US surge in value.
So where does fine wine sit amidst these tectonic shifts? In a good place! The fine wine market’s global exchange reported today that the LX50 is up 4% since June 23rd, and its year to date gain now sits at 12.9%. No doubt, two of the key drivers for the wine market has been Sterling’s negative performance and investors seeking stability.
Liv-ex Director, Justin Gibbs reports that the increase in value has also been based on volume of trade, which would indicate that the increase is not purely based on external factors: “Regardless of the reasons, moves such as these are good for all involved. Buyers feel the wind at their backs while sellers get a long awaited opportunity to exit. Whatever your view, it is a good idea to make hay while the sun shines (somewhere!).”
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