Luxury Wine Investment a good option
Posted by admin on July 10th, 2009function floatContent(){var paraNum = “3″ paraNum = paraNum - 1;var tb = document.getElementById(’floating-con’);var nl = document.getElementById(’floating-target’);if(tb.getElementsByTagName(”div”).length> 0){if (nl.getElementsByTagName(”p”).length>= paraNum){nl.insertBefore(tb,nl.getElementsByTagName(”p”)[paraNum]);}else {if (nl.getElementsByTagName(”p”).length == 3){nl.insertBefore(tb,nl.getElementsByTagName(”p”)[2]);}else {nl.insertBefore(tb,nl.getElementsByTagName(”p”)[0]);}}}}Had this report appeared six months ago, it would have provided some very sober reading for wine investors. Not least because the end of 2008 coincided with the first significant correction in the fine wine market for more than a decade.During the first half of 2008, Liv-ex, an index of the top 100 investable wines, climbed by a steady and impressive 9.5 per cent before stalling during the summer. In the final quarter of 2008 it fell by nearly 25 per cent; in October it lost more than 12 per cent of its value.The contagion also spread to rarer and more mature vintages, pulling down prices of 1996s and the 1990s in their wake. The situation was perhaps the most challenging of the modern wine investment era, for a variety of reasons.First, the economic downturn was far more serious than anything in the past 50 years. And unlike the Asian crash of the late 1990s, this crisis was truly global.Moreover, as Justin Gibbs of Liv-ex points out: “This time around, the amount of wine held for investment purposes had increased significantly, leading to a greater sell-off when the market turned.”Andrew della Casa of the Wine Investment Fund is even more bullish. “Notwithstanding the ongoing turmoil in the financial markets, we believe that investment-grade wine will generate positive returns in 2009, with double-digit growth returning later in the year.”Why such fighting talk? No doubt fund managers were hoping to re-establish some much-needed confidence. They also hoped to promote wine’s credentials as a safe haven in stormy economic conditions.Others look to the past to predict the future. “In previous periods of financial and economic turbulence, there were short sharp decreases in wine prices followed by a period of stability and a relatively fast return to good fundamentals,” says Will Beck of Wine Asset Managers.Other merchants and auctioneers have also registered record sales from the region. Of course, Hong Kong’s zero wine tax and duty helped, as did sterling’s weakness.”For the Japanese, our wines are almost 50 per cent cheaper than they were at the end of 2007,” says Richard Harvey-Jones of Seckford Wines. As a result, the index is now up 4.5 per cent for the year to date.Other grounds for optimism include the brightening macro-economic picture and the staunching of a flow of redemptions experienced by a number of funds.The auction houses also appear to have bounced back after wobbles at the end of 2008.