Recessions can be tough. Stock markets wobble, property values dip, and the general economic atmosphere gets murky. So why would anyone think about investing in something as luxurious as fine wine during these times? Here’s why:

1. Tangible Asset: Unlike stocks or bonds, fine wine is a physical thing. You can see it, touch it, store it. This tangibility can be comforting to investors when everything else seems intangible and unpredictable.
2. Historical Performance: Historically, fine wine has shown strong resilience against economic downturns. The Liv-ex Fine Wine 100 Index, which tracks the prices of 100 sought-after fine wines, has outperformed traditional stock indices over specific periods. For instance, during the 2008 financial crisis, many assets plummeted, but fine wine prices were relatively stable, and by 2011, the Liv-ex 100 had grown by over 40%.
3. Supply and Demand: Fine wines, especially the rare ones, are limited in supply. As the wine gets older and gets consumed, its rarity increases. Even during a recession, the world's wealthiest can and often do buy and consume these wines, pushing the demand up against a limited supply.
4. Low Correlation with Traditional Markets: Fine wine doesn't dance to the same tune as stocks or bonds. This means when stock markets are crashing, fine wine investments might not be affected in the same way. Diversifying one's portfolio with assets that move differently can reduce risk.
5. Long-Term Growth Potential: Wine gets better with age, and so can its value. Fine wine is a long-term investment. It's not about quick returns but gradual appreciation over years. Even if there's a recession now, a decade later, the wine's value could be significantly higher.

Statistics on Investing in Fine Wine:

• The Liv-ex Fine Wine 100 Index saw an appreciation of over 250% between 2001 and 2011, significantly outperforming traditional financial markets.
• In 2019, before the global economic challenges of 2020, the fine wine market was valued at more than $7 billion, highlighting its scale and significance.
• Wines from Bordeaux, particularly the First Growth wines, historically dominate the fine wine market, often comprising 80% of the market share.
• In the past 90 days, uber Burgundy wines like DRC, Leroy, Roumier have seen prices soften, indicating that aggregate blue chip wine prices are finally stabilizing and, in some cases, lowering, something not seen since 2008-2010.

To wrap it up, investing in fine wine during a recession might seem counterintuitive, but when done wisely, it offers a blend of stability, growth potential, and diversification. Plus, it's one of the few investments you can drink if things don't go as planned. As of January 2024, from a wine broker’s perspective it is a Buyer’s Market!