Whisky is a passion for many people. And, as people sip, share and talk about whisky, one further extension some consider is whisky investments. As we start a new year in 2024, we thought we'd write a simple guide to whisky investments. While this is not financial advice, we hope it's interesting.
What are whisky investments?
There are three main forms of whisky investment: bottles, casks, and companies.
First, you could invest in whisky bottles. Usually, this specifically means rare, limited edition, bottles. Depending on how many bottles are released, there may be more people who want to buy a bottle than there are bottles available in the first place. This means those lucky enough to get a bottle have something of value. If they then hold that bottle, keeping it safe for a number of years, the value may appreciate. For example, the supply and demand divide can be further heightened as some of those original bottles are opened and enjoyed. The remaining stock of unopened bottles dwindles further.
Second, you could invest in whisky casks. This is the process of buying a whole wooden barrel of ageing whisky. You would then hold that whisky cask in an official government-regulated bonded warehouse, as it continues to mature. Over the years, the flavours develop, and the whisky becomes even more delicious. As flavour increases, so does value. And once the cask has reached either a certain level of flavour, or a certain age milestone, the cask can be sold.
Third, investing in whisky companies. Particularly in the case of the larger whisky companies, they, or their corporate parent, may be listed on a stock exchange. Where those shares are publicly listed, you could buy a number of shares of your choosing and own a small part of the company.
What are the risks of whisky investments?
As with any investment, there are risks associated with whisky investments. Whisky bottles are fragile and can break; labels and presentation boxes can fade, get creased, or become water (or whisky!) damaged. Casks will slowly evaporate over time, and sometimes the wooden barrel can develop faults and leak. Neither bottles nor casks are regulated. While the major stock exchanges of the world are regulated, share performance can fluctuate. And, in the case of all three, past performance is not a guarantee of future performance. So, make sure you're sensible with how much you invest, that you're able to think long-term, and that ultimately if the investment were to fail and you lost your money, you'd still be ok.
What are the benefits of whisky investment?
Financial reward is an obvious benefit that whisky investors are hoping for. But, there are other benefits too. As we wrote about in our introduction, whisky investments are an extension of a hobby for many. They're a chance to see a different side of whisky. You'll learn lots, network further, and even make new friends. Plus, there might even be some delicious drams along the way!
Whisky investments with Spiritfilled
Here at Spiritfilled we specialise in whisky cask investments. We help clients buy, hold, and sell whisky casks every day. If it's a topic you'd like to learn more about, we'd be pleased to help. You can either download our free Whisky Cask Investment Guide here to read more on the subject, or contact one of our whisky cask experts here.