*Disclaimer. This is not financial advice. We are not financial advisors, nor are we qualified to give you professional financial advice. If you do require professional financial advice, it is strongly recommended that you speak to a qualified, professional, certified financial adviser. Just be aware that the value of your investment can go down as well as up. Past performance or any yields quoted below are not indicative of future performance.
Whisky, or whiskey, depending on where in the world you are and what you’re drinking, is a universally adored beverage that has been around for centuries and is engrained in many different cultures. Not only is it a fantastic tipple to enjoy on all occasions however, it can also be a very valuable investment.
Over the last several years, as more and more people have discovered the benefits of investing their money, whisky investment has grown exponentially in popularity. While this may seem a little bizarre at first, when you stop and think about it, it really isn’t any stranger than investing in, say, an NFT (Non Fungible Token), whatever that is.
People invest in things like art, and wine, so why not whisky? Why not indeed?! As Leo DiCaprio once said ‘you had my curiosity, but now you have my attention’.
If we’ve grabbed your attention and you’d like to learn more about whisky investment here’s a handy guide to cover all the basics.
Why Invest in Whisky?
To some people, investing is a scary prospect and is thought of as something only the wealthy can do. People think of investing and they think of The Wolf of Wall Street (Another DiCaprio reference there), penthouse apartments, Wall Street, and other common investing clichés we’ve been subjected to over the years. The truth of the matter is that anybody can invest.
Thanks to modern technology, we now have apps where we can invest as little as £1 in all manner of things. The most common investments are things like stocks and shares, funds, property, and gold. Lately however, we’ve seen an interest in whisky investment, and people have seen some very good returns as a result.
Here are just 5 reasons to consider investing in whiskey.
You should see great returns
While we can’t predict how the markets will perform, and indeed, how global economies will perform, generally speaking, if you see your whisky investment as a long-term investment, you should see great returns.
Providing you invest in the right tipple, the value of your investment should increase noticeably. As a example, the 2016 Macallan 18-Year Old Single Malt Scotch Whisky increased in value by more than 160%, jumping from $463 (£366) in 2020, to $1,209 in 2022 (£956).
Some years are, historically, better for any investments than others, but providing you invest wisely, this shows the potential returns you could see.
History is on your side
As mentioned in the disclaimer, past performance is not indicative of future performance. Whisky investments, like any other investment, can decrease in value as well as increase.
With that said however, historically speaking, the data is on your side. The whisky industry has enjoyed steady and sustainable growth over the last decade, which could indicate that that trend will continue.
From 2012 – 2022 for example, numerous indexes tracking whisky market growth have seen some very impressive results. The Knight Frank Index of rare Scottish single malts for example, increased by 586%.
Whisky investment can be a safer bet
People say that gold is a safe bet during economic uncertainty, but lately even gold has been a little turbulent with current global events.
Whisky investment however, can be a safe bet, especially during economic uncertainty. Like any other investments, there are varying degrees of risk to consider, but generally speaking, whisky investment can be less volatile than other investments, such as the so-called “meme” stocks, and don’t even get us started on Crypto!
The whisky market is growing
Another reason why more and more people are getting into whisky investment is the fact that the market is growing so much.
Back in 2021, the whisky market was valued at £69.8 billion. By 2025, it is projected to be worth £86.1 billion. That’s nearly an increase of £20 billion in just four years!
One reason why the market is seeing so much growth is due to the fact that there is more demand for whisky in more parts of the world now. In particular, China and other Asian countries have shown this spirit more love and attention in recent years, and the growth in popularity for Japanese whisky is as clear as day.
Investing in whisky is easier than ever
Finally, as we’ve seen more and more online investing platforms offering whisky investment as an option, it’s now easier to invest in whisky than ever before.
You can invest in whisky stocks, distilleries, breweries, whisky indexes, barrels, or even just buy a few bottles and hang on to them until they reach a value that you’re happy with.
Things to Know About Whisky Investing
Before you even think about investing in whisky, there are several things that you will need to know and consider beforehand. These include the following:
Decide what to invest in
First and foremost, before you invest your money in this golden amber nectar, you need to decide what kind of whisky investment to go with.
As mentioned, you can invest in whisky in a variety of different ways, and knowing how each of them works will certainly prove useful further down the line.
If you invest in bottles for example, do your research and look for rare, premium quality whiskies from reputable brands. Don’t think you can just pop down to your local off licence and pick up a bottle of Famous Grouse and stash it away for several years before selling it on at a profit. You’ll also need somewhere safe and secure to store the bottles.
Generally speaking, you’ll likely see better returns on whisky casks as these are far more likely to steadily increase in value. When you invest in a cask you need to choose a reputable distillery to ensure your barrel is in the safest hands possible. There will also be storage fees, barrel fees, bottling fees, and Duty taxes and VAT as well. Ideally you should invest for at least 3 years before bottling, though some will hold for longer as older whiskies are generally more valuable.
Other options are whisky stocks and funds to begin with, as these are just basic investments. Diageo for example, is a publicly traded company that owns some of the most famous whisky, and spirits, brands on the planet. A lot of high performing stocks and shares funds have Diageo as one of their top holdings, and for good reason.
Set yourself a budget
Whenever you invest any money, you should only invest what you can afford to lose. Investments do of course go up, but they can also go down. It all boils down to good days versus bad days.
Regardless of what you decide to invest in, you should always give yourself a realistic budget before you invest. Remember, you can always invest more so why not start low, get a feel for investing and how your investment is performing, and you can always top up your investment or add to your portfolio later down the line.
Just be aware that there will likely be fees and expenses to consider, though because whisky is classified as a ‘wasting asset’ (it has a predicted life of 50 years or less), when you sell it there will be no capital gains tax like there would with some other investments.
Understand that whisky investing is long-term
Despite potentially very impressive returns on your investment, if you see whisky investing as a get rich quick scheme, you’re in for a lot of disappointment.
You should see a decent, even impressive return most years, though there may even be some years where you see a loss. As previously mentioned, it is recommended that you invest in whisky for at least 3 – 5 years, though obviously the longer you hold your investment, the more it is likely to increase in value.
Do plenty of research
If you have decided that whisky investment could be right for you, before you begin investing do plenty of research.
Once you’ve decided what to invest in, try to find out as much about it as possible. Know which brands to go with and which to avoid. Macallan for example, is a very popular whisky brand amongst investors as Macallan bottles often see great returns. Vintages aged 18 and above for example, often perform very well at auction.
Rare whiskies also often do well, though again it’s important to find out as much about them as you can. Look at how popular the company is, how well it’s performed in the past, and predictions for the future. You can also attend whisky tastings and get a better understanding of what makes a good whisky.
Whiskies with a higher ABV generally do better, though look at the colour, the nose, the finish, and other characteristics that make a great whisky.
Understand that investments go up and down
Once you’ve invested in your whisky of choice, you’ll know how long you plan on investing at least, and will have done a whole bunch of other due diligence. The next thing to do is sit back, relax, pour yourself a wee dram (not from your investment) and forget your investment.
Too many people new to investing find themselves becoming obsessed and check the value every single day. The truth of the matter is that all investments go up and down every single day. Some days the markets are good, some days the markets are bad. Some days the markets are great, and some days the markets are terrible. If you plan on holding your whisky investment for 5 years, the value after one week is irrelevant.
Sure, checking the value every so often can be a good way of getting to know how the markets work, but if you check your investment one day and see that the value has dropped by 2%, don’t worry, it’s a perfectly normal part of investing. Investing all comes down to green days (good) versus red days (bad). You just want more green days than red days and you’re golden.
While we can’t offer you any professional financial advice regarding whisky investments, we can offer you plenty of advice about whisky, as well as plenty of delicious drams in the process.
If you’d like to learn more about Scotch whisky, or any other types of whisky/whiskey for that matter, make sure you check out GreatDrams.com.
Here, you’ll find all manner of useful resources relating to all things whisky, as well as a selection of the rarest, most delicious whiskies you could ever wish for, all for very reasonable prices.
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