Looking for a higher rate of return? Unhappy with your conditions at your local bank? Just take a look at this:
Whisky as an Investment
(Disclaimer - This article only wants to give you an insight in this new movement. Don't see it as advice for an investment although it has some hints for potential investors. Investing is a risk!)
Due to low interest rates and financial crisis people are always seeking new investment options. In the last years there was a remarkable movement into tangibles. In this category a lot of investors bought huge quantities of whisky speculating on rising prices.
Of course we are not experts in the field of investments, we are whisky lovers, but we know that there are a lot of distilleries which sell their whiskies for normal prices and after some years those prices doubled or trippled. So what happens here? Let's have a closer look.
Why Whisky?
You might ask yourself why people invest their hard-earned money in whisky without drinking it hoping for higher prices in the future. Well, there are several reasons:
- First of all our living standard ascends. Especially more and more people from Asia, Latin America and Russia are getting wealthier and they are willing to pay higher prices for good quality. So it isn't unusual anymore that people buy good alcohol for $ 50 -100 per bottle instead of booze.
- Rarity is another reason: The best whiskies on our planet come from small distilleries in Scottland, Ireland or Japan. Those small distilleries produce high quality whiskies with a great taste. The demand for high quality whiskies was rising in the last years but the supply didn't grow that fast. So it is not surprising that the prices rise.
- Whisky experiences a reincarnation. Everywhere on our planet whisky bars pop up. It is "in" again to sip a glass of whisky. To satisfy the demand huge quantities of good whisky are needed. And as we learned in our previous articles, whisky needs at least three years and one day for maturing in wooden casks.
Prediction for the future
For our impatient readers it is quite easy: Every opened bottle from one distillery increases the price of a sealed bottle from the same distillery.
Most distilleries are in the hands of huge companies which want to increase their profits. That is why a lot of distilleries mature their whiskies in a shorter time to satisfy the demand which reduces the quality a lot. In a few years, experts say, you won't see bottles with the labeled age on them because distillers mix older and younger whiskies up to save expenses.
This in mind some people invest a lot of money in old whiskies looking to sell them for higher prices in the future. (5-10 years)
They pay regard to factors like:
- Distillery: the smaller the better so that there is no mass production.
- Age: between 12-21 years at least.
- Special editions with a low number of bottles.
- Good vintages.
- Estate bottled: it is always better when producers are bottling, too.
Keep in mind that only Single Malt Whiskies are attractive for investors.
A hot hint seems to be a "Lost Distillery". Those distilleries gave back their license to distill and only have already produced casks left in their warehouse. The supply is limited and the demand therefore high. Investors love that!
How to?
Investors always buy three or more bottles of a special whisky.
- One for drinking.
- one for trading for other bottles or to fund the other two.
- one for the strong room as investment.
The whiskies with the biggest potential are said to be from the distilleries of Macallan, Glenmorangie, Lagavulin, Bowmore and Ardbeg. Most of those bottles start at $ 30-50 and end with up to more than $ 50,000.
The bottle doesn't need to be very expensive. Just have an eye on the age and if it is a special edition from a special batch or cask.
You see that it is quite reasonable why people invest in whisky.
The best thing: If you can't sell your whisky for a higher price you can still enjoy it :)
Here you can see how expensive some bottles are: https://whiskyauction.com/
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Disclaimer - This is no investment advice. It only should show that there are people out there who are looking for higher returns while "trading" whiskies.
Enjoy responsibly!
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