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TWIF predicts Liv-ex 100 to rise in 2012

Published:  24 January, 2012

Fine wine investment specialist, The Wine Investment Fund (TWIF) predicts that the main wine index (the Liv-ex 100) will finish 2012 10% above its 2011 year-end level.

TWIF has published its first ever 'fan chart' showing the probability of various different wine market returns over the next 12 months, in the same format used by the Bank of England to forecast inflation.

The prediction comes on the back of previous markets (1998 and 2008) which saw the market hit a low point in December and recover sharply the following year.

With graphical analysis also pointing to wine having been oversold, TWIF believes that this could be the most advantageous time to buy into the market since January 2009.

Fine wine prices fell by 15% in 2011 as the market corrected from the sharp rises of 76% since the end of 2008, nevertheless TWIF says on a long-term view wine has still proved itself to be an excellent longer-term investment, with prices over five years rising by 66% compared to 0.9% on the FTSE 100.

Andrew della Casa, director, TWIF, says: "Falls such as those in 2011 are extremely rare in the fine wine market and have generally been followed by strong returns for those investing at the right time.

"We believe now could be the "right" time, with our prediction for double digit growth this year."

"Although wine has historically been a low risk asset, we recognise that there are a range of possible outcomes this year and that is why we have produced the wine market's first ever 'fan chart' to help investors understand the risks involved and probability of a range of returns".

Downside risk comes from the possibility of a failure of the Eurozone stabilisation plans or a significant slowing down of the Chinese economy, says TWIF.

Source: (using the Fine Wine Investable Index) and calculations by The Wine Investment Fund