Choices In The Market  - 19th December 2008
By William Cohen - http://www.wineinvestment.org

The month of November shows stability in the fine wine market, since the large drop in prices in September and October. Compared to last year, trade has increased by 56% with US and European becoming more active buyers as sterling weakens. Although fine wine prices continue to slide, buyers remain outnumbered by sellers. Wine has been purchased wines at advantageous prices, in some cases the lowest seen since early 2007.

The economic downturn has been reflected in the value of the Fine Wine Index shows a 20% below its all-time peak had reached last summer. Unfortunately investors have seen the value of their stocks sink to an 18-month low following the stock market and bank crisis. Although until October wine had remained untouched by the economic crisis. Some classy vintages have lost as much as 25% of their value in one month alone.

That stocks that have been hit hard include Lafite Rothschild 2004, which decreased by 28% per cent from £2,775 per case to £2k, and Chateau Montrose 2003, which dropped 23% from £1,625 to £1,250. A case of 2000 vintage from Chateau Ausone - ranked Premier Grand Cru Classe - fell in price from £15,575 to £12,200, a loss in value of £3,375.

Financial advisers have recommended that fine wine is one of the best options for making money during the credit crunch, but experts suggest that the market will feel the effect of the recession. The high-end wines have suffered the brunt of the fall, because in the past they have been the easiest to sell and made the biggest profits. People are very cautious during the economic crisis and thought of having their money invested in wine may not be the best option for many.

Wines have also been affected by the drop in sales through restaurants. Many places have been reluctant to reduce the cost of a bottle despite the economic downturn. The drop in prices in October has been the steepest however experts are confident that the market will recover. Therefore in the long-term fine wine investment is recommended and will be profitable. Anyone who bought fine wine at the start of 2005 would have seen its value double by spring 2007, then a further 25% rise by summer 2008. Buyers would now benefit from the low prices, which have made good wines affordable!

Clos des Papes 2007
Fonseca 1966
Pichon Baron 1986
Ducru Beaucaillou 1986
Fonseca 1977
Carruades de Lafite 2003
Ausone 2003
Cheval Blanc 2005
Margaux 2005
Sassicaia 2001

Lafite Rothschild 2009
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Lafite Rothschild 2008
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Pétrus 2009
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