And so it goes on – there is seemingly no lack of steam in the remarkable growth being enjoyed by the fine wine market in 2016. For sure it was overdue, the prolonged stagnation post 2011 left many investors disillusioned, some merchants massively over-exposed and sucked the energy out of the market during 2012 – 2015.
However, all investments go through cycles and fine wine is certainly benefiting investors now. Liv-ex reported to trade members today that the Liv-ex 100 index has risen for the tenth consecutive month and is now up 18% YTD. The Liv-ex 100, termed by Reuters as the industry’s leading benchmark, measures the price movements of 100 of the most sought after fine wines for which there is a strong secondary market.
The Liv-ex Fine Wine 50 Index over the same period is up 21.3% reflecting the significant return in growth in demand for the Bordeaux First Growths.
We all know that fine wine does particularly well during times of economic uncertainty and if you are thinking you have missed the boat in terms of the growth already seen this year, one thing is for certain – with Theresa May’s announcement this week that Article 50 will be triggered in March 2017, the prevailing uncertainty will be a constant theme for the foreseeable future. Including fine wine in your portfolio could be an important addition providing stability and growth over the years ahead.
The trade update points to the particularly strong growth in value in wines awarded 100 points by Robert Parker. His retirement from scoring Bordeaux, has created greater rarity for Parker 100 point wines. Just like the works of Picasso, Monet or other notable creators of rare, luxury items, once they have gone and no more can be produced, their rarity affects value in an extraordinary way. Parker may not have made the wines physically but he has certainly helped make them desirable in the eyes of the investor. If you are the proud owner of a Parker 100 point wine – congratulations – and if not, they would be a smart addition to your portfolio now.
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