A Guide to Whisky Investing

Aged whisky in a dark bottle

With more and more people looking to invest their money, we’re always on the lookout for different ideas and strategies on how you can reap future financial rewards. With the recent rise and subsequent fall in popularity of Bitcoin and other cryptocurrencies, people are now more aware of the potential pitfalls with investing in digital commodities, with some reverting back to physical, rather than digital.

However, this certainly doesn’t mean that you should flock to investing in gold, but rather invest in liquid gold, otherwise known as whisky. Having become increasingly popular in recent years, we’re seeing a very clear trend of people of nearly all budgets investing in bottles to sell for a profit in the future.

So, why not pour a glass as you read through our article on how you could potentially make future profits by buying up a bottle of whisky.

Do Your Research First

As with all investments, whether crypto, stocks and shares, commodities, currencies or whisky, researching the topic is of paramount importance. You wouldn’t invest in a company that you didn’t know about, so why do the same for whisky? 

There are countless reasons why a whisky could increase in price, from a sudden surge in demand to being part of a limited edition production. Not all investment whiskies are old either, with the recent Game of Thrones-themed bottles providing a strong investment option for those who are fans of the series. With each bottle being produced at a different distillery, having the set is much more important than having one or two and can increase the value of the bottles overall. However, with products like these, it’s crucial to consider supply vs demand and whether people will continue to seek these limited edition bottles after the show has stopped. 

Whisky barrels stacked on top of each other

Check for Past and Present Trends

Like with other investment options, trends can be both helpful and a curse, as it can be easy to make past data fit into a current scenario (“it rose in price then, so they must rise in price again now”). Being subjective is vital and being able to ignore any personal attachment to the potential investments will allow you to make better, more informed decisions. 

Current trends can also be helpful in determining the rise for newly produced bottles. If you are part of any whisky forums of Facebook groups, often these can provide a good gauge on the wider community’s thoughts towards a new product release. If you know that lots of people are interested in a new limited edition bottle, then this is a strong indicator that the demand will outweigh the supply, especially if the distillery have placed a number on how many bottles they are going to produce. 

Popular culture can also play a big part in the rise in popularity of certain brands. The release of the James Bond film ‘Skyfall’ prompted a rise in popularity of the brand Macallan, after the drink was featured in the film. The brand has also been featured in Netflix’s original series House of Cards, helping to bolster the awareness of this Scottish brand. 

Another example of checking trends is reviewing the rising popularity of whisky from different countries. We’eve started to see more and more Japanese whisky for sale here in the UK recently, with people understanding that although traditional blends are still very popular, the exotic flavours that come from a foreign drink can be just as exciting. Northern countries such as Sweden and Iceland are also relatively new on the whisky-producing scene, as is Taiwan, so these are potentially countries to look out for in the future! 

Insurance

Depending on the size and value of your investments, insurance is likely to be a good idea. Unfortunately, accidents do happen and can often be outside of your control, so having a policy in place to protect your investments means you can rest easy. 

As part of the insurance process, you may need to place a value on your collection. This can be tricky, as we tend to place a higher value on things that hold sentimental value to us, and it can be difficult to be objective when assigning monetary values. If you have a particularly expansive collection, we’d suggest getting a professional involved to help with the valuation as this can take away some of the ambiguity.

Quick Returns or Long Investment?

This is a question that you need to ask yourself at the start of your whisky investing career. Do you want to hold onto those rare bottles in the hope that you can add some value over time? Or do you want to quickly flip bottles for short term returns. Naturally, in the whisky world, a short term return could be over the course of a year or two, rather than a month, so even the short term flips allow you chance to enjoy owning a rare piece of whisky heritage. 

Want to learn more about making watertight investments? Make sure to check out our Money Shed blog here!

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