How to invest in whiskies in 2022
How to invest in whiskies in 2022
If you wish to learn more about investing in whiskies in 2022, this is the blog for you! We dive into the ins and outs of investing in whiskies and how you can get started!
Why collect whiskies
To some, they collect rare whiskies as a passion and choose to keep it for special occasions
Others treat whisky as an investment, as with other rare products like antiques or paintings that increase in value with time; whiskies are the same!
Based on Knight Frank Luxury Investment Index, art appreciates 10% in value a year and 146% over ten years. However, rare whiskies can generate 23% in a year and 540% across a decade!
Join us as we dive into why investing in rare whiskies have been increasing in popularity over the years and how to identify if a particular whisky is a good investment!
investible qualities
What should you look out for when choosing to invest in the right whisky that will grow in value?
Scarcity
Whiskies that are from distilleries that have stopped production will be the obvious one in this category. When there is no supply, the existing bottles in the market will keep dwindling and with that decrease, the demand and price will increase!
Status
Some brands are tied with prestige and elegance. These are also brands that typically have low production volume since its targeted towards a very specific audience. Whiskies like Louis XIII are synonymous with prestige and glamor.
Rarity
Some brands like the Macallan, release a very limited number of bottles for their limited edition series and these are coveted by whisky lovers from all over the world. These whiskies are made hard to obtain as the release is tightly controlled by the brand.
HOW to invest???
Now that the huge 540% profit margin has caught your attention, you must wonder: "how can I start investing in whiskies?"
And the answer is simpler than you may realize and just like most other mid to long term investments, you simply do your research on what's good long-term then buy and hold!
There are a few different ways you can get yourself started in whisky investment and here they are in order of feasibility:
01.
Buying and selling individual rare whisky bottles
Doing your own due diligence on what whiskies are highly sought after and being on the lookout for rare whiskies at affordable prices is basically the gist of this investment path.
You can either purchase a rare bottle at a price point that is acceptable, and sell it at a marked up price immediately or hold in for a few years and sell it when its value appreciate over time.
There are many factors at play that can affect the price such as the age of the whisky and the scarcity of it (how many bottles are in the market)
02.
Purchasing entire whisky casks
A lesser known fact is that distilleries do sell whole casks of whisky ranging from 200-500L and you can invest in these casks and decide when you want to sell in its entirety or bottle it and sell it as individual bottles! You can decide the price at which you would like to sell your unique whisky.
This method requires the highest level of expertise of the three and a cask will set you back roughly S$5,000.
In Singapore, there are retailers whom offer a cask ownership program where they act as a middleman and offer guidance and handle all administrative matters for an admin fee!
03.
Investing in whisky funds
This method requires little expertise in the field of whisky but it requires to highest level of financial commitment of the three.
There are several whisky funds out there with different mechanics; a popular one is the Platinum Whisky Investment Fund which grossed an annual rate of return of 17%!
In general, the way whisky funds achieve growth is via market appreciation , and maturing and bottling casks.
This method is the least feasible of the three due to its minimum initial investment requirement of a whopping S$180,700!
In the next section, we will recommend some rare whiskies you can look into investing
The Macallan
Speyside Single Malt
In general, The Macallan as a whisky brand is tantamount to how BMW is seen as a premium brand in the world of cars.
It is expensive to get a bottle and even more expensive to get a bottle in your hands given how Macallan limits the allocation of their bottles that are 18 years and older!
Premium Ingredients
The Macallan uses top quality ingredients especially in the barley they use, and they cut no corners in their production process.
Incredible marketing
With their highly competent marketing team, Macallan has stabilized its foothold as a premium whisky brand.
If you are looking to invest in some of Macallan's products here are some items that you can look at:
- Macallan 18
- Macallan Rare Cask Collection
- The Macallan Edition Series (No.1-No.6)
At 3mk, we do try to stock up on Macallan's older whiskies so do check in with us from time to time and you may spot a Macallan 18 or older up for grabs!
Springbank
Campbeltown Single Malt
To whisky lovers, Springbank whiskies are near the top in terms of quality. Springbank distillery is relatively small and their releases sell out extremely quickly!
You cannot go wrong with a bottle of Springbank and bottles that are sold at retail prices will almost immediately be bought out and sold in the secondary market for more.
High demand, low supply
Being a small distillery, Springbank barely produces enough for their own fans to consume; leaving collectors and speculators picking up the whisky at auctions at ever rising prices
If you are looking to invest in some of Springbank's whiskies, here are some of our recommendations that you can look out for:
- Springbank 12 Cask Strength
- Springbank 21
The Dalmore
Highland Single Malt
Dalmore is a well known distillery containing some of the oldest and rarest bottles ever created; making it one of the go to collectors distilleries.
With Dalmore, you typically want to collect their older whiskies as these are the ones that are more sought after.
Old but gold
The Dalmore is one of Scotland's most renowned single malts dating way back to 1839.
If you are looking to invest in some of Dalmore's whiskies, here are some of our recommendations that you can look out for:
- Dalmore 40
- Dalmore 60
Tips for first-time investors
Be aware of fakes
As the demand for rare bottles rise, more scammers are capitalizing on it which resulted in more fake bottles being in the market.
Arm yourself with the knowledge to discern the real and fakes to prevent yourself from getting scammed!
Do ask for second opinions from your local experts to keep your investments safe!
Do your due diligence
Doing your research about distilleries, the whisky market and which bottles are desirable is highly recommended.
Knowledge of the industry will help you to make well-informed investments and spot opportunities better!
Mix around with whisky lovers and learning a thing or two about the local favorites will help too!
Store your collection well
You may have plans to keep a whisky bottle for a long period of time before selling it. Whilst storing it, its important to do so properly to maintain peak quality.
Make sure that the bottle is stored in a cool, dark environment that is not humid and kept upright to prevent the cork from disintegrating.
Be patient
As with all investments, whisky investment is all about timing. Keeping an eye on the market and distillery performances or latest releases will help you identify new opportunities.
Patiently look out for the best deals you can snag and hold onto the bottle dearly till the day you decide to sell it!
