September 2017 Wine Investment Report

This monthly update is going to increase in size as I decided to offer this as a monthly wine investors newsletter to you. I hope you find it helpful in your assesment of the markets and increases your knowledge when building a wine investment portfolio.

Don’t forget I am only an email away if you ever need help or advice. No question is a stupid question, my grandfather used to tell me.

I have read so many articles in the last few months with the naysayers telling us that doomsday is coming for the financial markets. Jim Rogers who founded the Quantumm fund with George Soros says we are heading for the worst financial crisis ever!

Do I agree with him? Well, I do think most of these pundits are preaching for publicity and its a common belief that those who predict carry little knowledge.

I would rather just be honest and tell you I have no clue where this stock market is heading. One can pour over financial materials all day and night (Which is what I do!) and you still might as well take a lucky guess. If I knew the next point of the market correction, I would be on Oprah as a person with special powers..

So let us explore the facts to see where we are.

The Dow Jones and many of the other markets are at an all time high. But every five years ,they do that anyway. Unless there’s a crash that knocks them down a few pegs. 22,400 points for the Dow is not a bad effort. In six months since Trump was elected, it has increased around 19%. And the top companies like Apple have increased their share price 40%. Now that’s a pretty aggressive return, so we must take note of that.

So, is Mr Trump steering us into a Mexican wall? Better hold on to your sombrero!

I do notice that confidence is faltering on the markets lately, so it’s not a bad idea to move assets or funds into safer environments or at least bank in some of your profits. The rallies however are phenomenal. One other clear fact is that the interest rates remain extremely low with the U.S Federal Reserve Interest rate at 1.5% and a further hike expected to 1.5% this allows conglomerates and corporations to continue to buy their stock using borrowed money.  This minor fact alone gives strength and reason to the continuous rallies we are seeing.

As for a correction, based on exchange rates still remaining low, meaning companies are still able to pump up their share prices with borrowed money. This and confidence that Trump can move on his tax policy will hopefully maintain the focus for growth. But one can only hope and try to remain in a balanced portfolio with some safer assets.

We have to consider the political situation in any given market, it does beg the question whether Trump and Kim Jong Un are born of the same egg.  Hopefully Richard Branson can build his Rocket ship to Mars and send them both to fight it out over there. While the rest of us get on with real life issues, such as what bottle of wine to open next or who to invite to the next dinner party.  Or why is my teenager child suddenly being nice to me.

In summary, I will not completely disagree with the nay-sayers and accept that there may be SOME form of correction on its way to us. Whether it reaches us in time for Christmas, I’ll leave that for Santa to decide but for now, it’s time to bottle up your fears and build on your fine wine portfolio, because here in front of you is a market that has done 230% in the last 10 years.  And you have a trusted team of fine wine experts who are more than willing to help guide you in any way we can.

Wait a minute, before I go, I hear some of you saying, “Well, why haven’t I made that return in my portfolio with you???” And my response would be, “If you have had wines in your portfolio for 10 years and they are Bordeaux first growths, you would be seeing more than 230%, if you have had wines for less than that period, then sit back and enjoy the growth, because the growth we are seeing in fine wines at the moment is a long term decision.  Think of it as a marriage between your money and your life. Remember, you get out of marriage what you are prepared to put into it:)

I hope October treats you well and you are gearing up to drink some nice wine for the festive season at the end of this year.

Sincerely,

James E Pala
Europe’s Number 1 Fine Wine Investment Analyst
Click here to speak to me james@sureholdings.com