November 2019 Wine Investment Report!
Your Wine Portfolio Was Updated on the 1st of the Month
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The fine wine market volatility continues and we see big swings in wine prices from the latest price valuations
As BREXIT becomes more of a myth than a reality, the UK takes a short break from the concept of leaving the EU to figure out who they want to lead their country. An election has now been called and the UK pound should remain stable for at least a month. There was some strengthening of the GBP against the US Dollar since the start of October, and it moved UP from 1.22 to 1.29
The wine market also had an upswing at the beginning of October however towards the end of the month it subsided. The erratic Champagne orders for Christmas has decreased now that Brexit looks to be off the table until 2020. The US Dollar did also soften from unexpected strength in China’s PMI manufacturing data.
The stock market continues to remain at an all-time high, as of writing this update, The S&P has 80% of Q3 earnings reported, 65% of companies have beaten on Earnings per share although the companies that missed out on Sales and EPS underperformed the S&P by 2.8% which is lower than the historical average of 2.4%. A very positive job report also beat expectations adding 128,000 jobs. But U.S manufacturers are still suffering from the China trade war.
In summary, we are in a fairly soft economy.
I’m of the opinion that we are already in a recession since there is so much pressure from the Fed who again pulled back interest rates for the third time in a row this year, as they try to prop up the market. A drop in U.S housing prices is another indication that the bears could be lining up for an attack.
If we are not in a recession, then why is the Fed lowering interest rates so frequently? With a current rate of 1.75%, compared with a rate of 11.5% which peaked in 1985 then following the crash in 1987 cut to a drastic low of 6%. Rates going back anywhere near to 10% are considered a pipe dream.
If you are selling wine, Lower prices in 5% increments to attract a buyer. There are buyers out there, in fact, the smart buyers are snapping up bargains in the market in expectation of a bull run in fine wine. Rhone Valley wines are slow to sell, better hold until further updates, but you can always test the market with a bargain offer. Champagne is hot and cold, but the gains are there so take advantage of them since we have had excellent growth in Champagne recently.
Remember our recommendations are negotiated for you before you see them, which means you can often buy a new recommendation below market to offset any older wine that you are selling. The younger vintages will give you an opportunity for faster and more aggressive growth.
If you are a buyer, I have been able to secure some amazing deals with ‘negociants’ on new vintages lately and hope to have more in the near future. There is a great opportunity to negotiate and it is an opportune time to jump into these younger vintages which can be found at a bargain right now.
The growth potential of them is likely to be at least 12-15% per year if you find the right deal. Look out for my next recommendation.
All the indicators are pointing to a potential boom in the fine wine market, this is the time to invest big in wine.
See below the winners and losers for November versus December.
Below are the five, top and bottom movers compared to the previous month. Over 100 wines are valued each month. The wines valued are ALL OUR recommendations from the last fifteen years.
The new prices are reflected in your online portfolio every month.
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