Talking trade: January 2015 so far

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What can we expect from the fine wine market in 2015?

Will the unprecedented four years of decline continue, or are things set to change?

If the first early days of trade in 2015 are anything to go by – plus the six-month performance of the Liv-ex Fine Wine 50 – it’s going to be a more interesting year.

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The Liv-ex 50 rose 1.2% this week, closing on 269.90: its highest level since 10th June 2014. The Bordeaux 500 was the second best performing sub-index of the Liv-ex Fine Wine 1000 in the second half of 2014, rising 1.4% from June to December.

Combine this with the fact that Bordeaux accounted for 87.6% of trade this week and it would seem that sentiment towards the region is changing.
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The above information has been taken from the Liv-Ex website:

My comments:

We must not get carried away BUT there is room for cautious optimism for Bordeaux prices in 2015 especially if the greed in Bordeaux bows to intelligent pricing for the Bordeaux 2014 En Primeur campaign ,which will begin in late April.

The regional trading figures are showing renewed interest in Bordeaux however this does not necessarily mean prices are on the increase. These figures are trading volumes only and prices still remain fairly flat. I suspect that there has been some movement due to the fact that many investors may have taken the view that the market has been static for too long ( downward or stationery since June 2011 in real terms ) so why not sell, take the cash and invest in other commodities.

Historically Bordeaux prices have always eventually rebounded and as the global economy struggles to break out of the shackles of recession, the return may well be gradual but I believe will happen this year.

The area to keep away from are the younger vintages eg 2009 and 2010, which were overpriced when offered En Primeur. Equally 2011, 2012 and 2013 are not of interest with regard to investment money.

The prices of the 2008 vintage were surprisingly hit with many `super second’ chateau loosing between 15-20% of their value. This is a very good vintage and was correctly priced on release and I believe prices must surely improve at some stage in the future.

So in reviewing investment in fine wine, I would recommend taking a look at the Bordeaux vintages of 2001, 2005 ( especially ) and 2008 and complement your wine portfolio with some burgundy Premier Crus and Grand Crus from the 2012 and 2013 vintages. Taking a medium term investment view, some 2002 Vintage Champagnes and older vintages are worth looking at.

And if you drink something new and compelling, try the wines made from the Norello Mascalese grape from high altitude vines on the north slopes of Mount Etna. These wines are complex, fresh , have intensity and ageworthy and made in small volumes.

Drink well,

Philip