As we inch towards the end of another year, 1275 continues to reflect upon market conditions, and our approach to building perfect-provenance wine portfolios within them. For three years, the mainstream wine trade has been enduring the fallout of wine’s biggest price bubble to date. Our objective has always focused on the long-term, and on identifying opportunities where market arbitrage works in our clients’ favour.
A Glimmer of Light
Since September, Liv-ex’s narrowest measure – the Liv-ex 50 (comprising exclusively Bordeaux first growths) has sustained rises for the first time in nearly three years. In the months leading up to this, 1275 has been capitalising on the most attractive entry points we’ve seen since before the pandemic – particularly for top, back vintage Bordeaux.
This isn’t the first time we’ve shared market data with our readers, nor will it be the last. But beyond the short-term swings of “the market” (as represented by Liv-ex’s most diverse measure – the Liv-ex 1000) (see figure below), there lies a persistent trend: given enough time, the right wines appreciate in value without fail.
The Rebound
Volatile times elevate the appeal of low-risk, defensive assets. Gold’s recent surge is proof enough that we are in an era of crisis investing. Historically, fine wine has offered similar benefits, hedging inflation and preserving wealth. While the recent price correction may have rattled some confidence, the slow return of investor trust should silence any lingering doubts.
Finding the “sweet spot” of an asset traditionally marked by a delayed reaction to macroeconomics, let alone attempting to predict its own internal dynamics, is a tricky business. Trying to buy at the absolute bottom is often a losing game in a fragmented, unregulated market. Case in point: after just one month of Liv-ex growth this autumn, prices from Bordeaux negociants have already began to creep upwards – with some of the lines we have been trading heavily being adjusted by 10% right away.
The Final Act
For those still hesitating, this turning point is not a closed door, but rather reassurance. Even if the very best trades are once again behind us, entry pricing is a sliding scale – the key is keeping a long-term view. And while many wines once deemed investment-worthy no longer qualify, icons such as Haut-Brion, Mouton, Champagne Salon (the list goes on) remain in a league of their own. These are consumable Picassos – rarities that will only grow scarcer as climate change reshapes production. For such treasures, incremental price shifts fade into insignificance.