Investing in whisky can be both rewarding and enjoyable. It's an extension of a hobby for many people. But, it can be difficult to know where to start - and what to consider. So in this article, we're going to look at 10 frequently asked questions about whisky investments.
Is whisky a good investment?
Yes, whisky can be a good investment, as it has the potential to grow in value over time. There are several factors which influence the investment potential of a whisky. These include the brand name, age, and rarity of the whisky, as well as how popular, or in-demand, it is.
How do I start investing in whisky?
First, you need to do your research. Learn about different types and brands of whisky, market trends, and historical pricing. Networking with other collectors and experts, attending tastings, and joining whisky forums can be a great way to learn. It's sensible to think carefully about how much you can afford to invest - and whether you'd be ok if this sum went down, rather than up. It's also useful to build good relationships with reputable retailers or auction houses, to make sure you can access authentic, quality, whiskies at a fair price.
What are the risks associated with whisky investment?
As with any investment, there are risks. You should make sure you consider these risks carefully, as well as the opportunities. Risks for bottles include counterfeits, damage and breakage. Risks for whisky casks include quality, evaporation, and leakage. For both bottles and casks, you need to remember that value can go down, as well as up, and that past performance isn't necessarily an indication of future performance.
Ways to mitigate your risks include proper research, and buying through a reputable seller. Make sure you have confidence in the authenticity of what you're investing in, and that you get the right paperwork. Make sure it is carefully stored, and monitored over time. And, where possible, consider taking out insurance.
How important is the age of the whisky for investment?
Older whiskies can be rarer and more desirable, both good factors. But age alone doesn't guarantee success. The brand, bottling, and market demand also play significant roles in determining a whisky's investment value. Some younger whiskies from sought-after distilleries or limited releases can also be valuable.
Should I choose limited edition whiskies to invest in?
Investing in limited edition whiskies can be a good strategy due to their rarity and unique characteristics, which often attract collectors. But, it's important to research the distillery's reputation, the whisky's quality, and market demand.
Should I invest in bottles or casks of whisky?
Investing in bottles is generally more accessible, offering flexibility and lower costs. Bottles from limited releases or exclusive distilleries are particularly popular. Whisky cask investments, while potentially more lucrative, involve higher upfront costs and additional considerations like storage, insurance, and, in some cases, eventual bottling. It's suitable for more experienced investors with a deeper understanding of the market.
How should I store my whisky bottles?
Looking after your whisky bottles is vital. They should be kept upright to prevent the cork from deteriorating. They should be stored in a cool, stable environment away from direct sunlight and fluctuating temperatures.
Whisky cask storage requires professional warehousing, where conditions like temperature and humidity are controlled, and the Government has the proper oversights.
What is the potential return on investment for whisky?
The potential return on whisky investments can vary widely based on the brand, rarity, and market demand. While some rare whiskies have seen significant growth, the market can be unpredictable. Generally, whisky is considered a long-term investment, and you should be comfortable holding on to your investment for a good number of years.
How long should I hold onto a whisky investment?
There's no single right answer to how long you should hold on to your whisky investment. Some limited editions or highly sought-after bottles might grow in value quickly. Others, for example, those from established distilleries, may require longer to grow in value. A general rule is to monitor the market and consider holding for at least 5-10 years.
How do I sell my whisky investment?
Selling whisky investments can be done through auction houses, private collectors, online marketplaces, or specialist retailers. It's important to consider factors like timing, market conditions, and the platform's fees and audience.
Learn more about whisky investments with Spiritfilled
If you'd like to learn more about investing in whisky casks, we'd be pleased to help. We help clients around the world to buy and sell whisky casks every day. You can speak with one of our whisky cask experts here, or download our free Whisky Cask Investment Guide here.