A Picture is Worth a Thousand Wines…

I conducted an in-depth analysis of the Liv-ex 1000 index, calculating rolling 1–5 year CAGRs (month to month) from 2004 to 2025. The resulting chart reveals critical insights into both long-term stability and short-term opportunity in the fine wine market.

Wine is Not Just a Safe Store of Value, it’s a Cyclical Opportunity. And the Next Cycle is About to Begin.

Fine wine has long been lauded as a stable store of value — a tangible asset with low volatility, steady long-term returns, and intrinsic cultural appeal. But what’s less well understood — and what savvy investors SHOULD BE starting to pay more attention to — is that fine wine is also a cyclical opportunity. And right now, the data suggests we’re at the beginning of a particularly attractive moment in the cycle.

The Market Has Corrected. Historically, This Is When It Rallies.

Using data from the Liv-ex 1000 Index, the broadest measure of the global fine wine market, we’ve analysed rolling annualised returns over 1, 2, 3, 4 and 5-year periods, month by month, going back to 2004. This approach gives us a powerful lens to view not just long-term performance, but how wine reacts at different stages of its market cycle.

The findings are clear:

• Every major market correction was followed by a strong multi-year rally.
• These upswings typically began just after 1-year rolling returns fell sharply — a classic “bottoming out” signal.
• In 2024, we witnessed another such correction. The 1-year CAGR dropped to deeply negative territory, while 2 and 3-year returns are trending down — mirroring the patterns seen before past recoveries.

In short: the wine market has dipped. And historically, this is exactly when the greatest gains are made.

Time in the Market vs Timing the Market

While the 1-year and 2-year returns show clear cyclical behaviour, the 4-year and 5-year rolling returns remain far more stable — often in the 8–12% range. This reflects wine’s core appeal: a low-volatility, inflation-resistant asset that rewards patience.

But for those who understand the market’s timing, there’s an edge to be gained. Buying at or near the bottom of the cycle doesn’t just mean stable returns — it means accelerated growth.

Why Wine is Cyclical

Like any market tied to real-world supply and demand, wine is affected by:

• Global macroeconomic trends (e.g. inflation, interest rates)
• Shifts in wealth demographics (e.g. rising appetite for tangible assets)
• Vintage quality and scarcity
• Changing consumer demand across regions

But unlike equities or crypto, the wine market moves more slowly and predictably. There are no flash crashes or overnight collapses. This makes the troughs easier to identify — and the rebounds more dependable.

What This Means for Investors Today

The data points to a compelling truth: we’re at the bottom of the current cycle. Returns across the board are suppressed. Sentiment is cautious. And that’s exactly when opportunity knocks.

The best time to buy is when everyone else is hesitant. That’s when the next cycle quietly begins.

Whether you’re building a diversified portfolio, seeking uncorrelated returns, or simply looking for a smarter place to put your capital — fine wine offers a unique combination of long-term resilience and cyclical upside.

And right now, it’s offering both.