Do you know your bourbon from your scotch, your single malt from your blended? Investing in whisky is a relatively untapped investment opportunity; some sources suggest healthy returns even within the space of a year.
Of course, with all investing there’s some risk. You’ll need to do your research and see what tends to sell well after maturing. And the longer you can hold onto your investments, the better.
Read on for how to get into whisky trading – and why it could be even more lucrative than other types of investments.
- Why should you invest in whisky?
- The basics of whisky investing
- Case study
- Types of whisky investments
- Useful links
- The golden rule of investing
Why should you invest in whisky?
The site Whisky Invest Direct shows how it’s possible to make bigger returns on whisky investing than stocks or even property. Their research suggests that buying the right newly-made scotch could net you over 250% profit after 12 years.
And it’s not always necessary to wait that long. Savvy investors make hundreds buying and then reselling their whiskies after just a few months. See Mark’s case study below for how he does it.
For many whisky investors, it’s also a chance to make money trading a commodity they enjoy. It’s good if you’re already into whisky, or at least willing to research it, as you’ll gain a better understanding of why certain bottles grow in value over time.
The basics of whisky investing
There are two main ways of investing in whisky: using platforms like Whisky Invest Direct, or buying and selling yourself.
Each method has its own advantages. Third-party platforms store your assets for you, so there’s no need to figure out where to keep the bottles. They also have insurances and protections in place and your stocks are regularly audited.
If you’re buying and selling yourself, you’ll need the space at home to do so. This might not be an issue if you’re storing a few bottles, but becomes trickier if you start investing in more whiskies.
That said, doing it yourself means you can choose how to trade your bottles. You could sell on sites like eBay, at traditional auctions, or to private individuals.
If you do store your own whiskies, you’ll want to find somewhere at a constant temperature (usually between around 15-20°C), and away from direct sunlight. A proper cellar which stays between 15-18°C is perfect, but a shelf in a dark part of the kitchen is often just fine.
You’ll also want to keep bottles upright most of the time, but turn them once a month to moisten the cork. Whisky can usually be kept unopened for a very long time.
Unlike wine, if it’s been matured in the barrel for 15 years, say, and then stored on a shelf for 100 years, it will still be considered a 15-years matured whisky.
Case study: Mark Whitehurst
Mark has been collecting whisky for many years and has a “small collection” of around 100 bottles. Although he does enjoy drinking the occasional bottle, he also likes to sell. Any money he makes from his sales is invested in order to buy more whisky.
“If you open a bottle it becomes worthless,” says Mark, so you’ll need to have self-control and not give into temptation! If you’re looking to start your own collection, he says you should go for the likes of Ardbeg, Macallan, Brora, and Laphroaig and keep your eye on popular forums like Whisky Magazine and WhiskyWhiskyWhisky for news and advice.
Mark has three key tips for you: “Firstly, enjoy your whisky. Secondly, research various whisky sites and forums. Thirdly, look at whisky from demolished distilleries; the casks will run out quicker and the price will only go upwards.”
Mark strongly advises you buy limited edition whiskies and those produced for special occasions like the Queen’s Diamond Jubilee. These shoot up in value within a matter of months.
In April 2011 Mark bought three bottles of a limited edition Macallan Royal Wedding Whisky for £150 each. Just three months later he sold one for £500 on a whisky auction site. Today, the same bottle is worth thousands.
Types of whisky investments
One of the most popular ways to invest in whisky is to buy a bottle, wait for it to mature over a few years, and then sell it again. Higher-end whiskies have vintages like wine. So, a whisky from 2020 is likely to be far more valuable in 2040 than in 2025.
Of course, you can’t rely on the types of bottles you find in a supermarket. Prices will stay quite static for those, and you won’t make any significant money back. Start browsing rare whisky sites to get an idea of how vintages become valuable over time.
Mark’s idea of buying from defunct distilleries is great because you’re purchasing a product that will only get rarer. Whereas Jack Daniels and Johnnie Walker will be producing whiskies for decades to come, a discontinued brand will get scarcer and more valuable as the stocks run out.
Buying inherently rare whiskies, whether from defunct distilleries or special editions from royal weddings and the like, often means quicker returns. However, you’ll need a good knowledge of the market to rely on this, so the “waiting game” method can be easier to get right.
As you become more confident, a diverse stock of aged and inherently rare whiskies is a good thing to aim for.
The following links will get you started with your research and answer more of your whisky investing questions:
- Why you should invest: Whisky Invest Direct
- How to store whisky: Single Malt Lodge and The Whisky Shop Blog
- Specialist online whisky retailers: Whisky Online, The Whisky Exchange, and RareWhiskySite
- Online auction and selling sites: eBay, Amazon, Gumtree, eBid
The golden rule of investing
As with any investment, it’s vital you only use money you could afford to lose.
So, if you’re setting aside £1,000 to invest, you must be prepared to lose that if things go wrong. Research is key to minimising risk, but it’s always possible any asset will go down in price, whether it’s a house in London or a bottle of single malt.
It’s a good idea to do your research and then get your feet wet in the world of whisky investing by starting with small sums. Never invest money you might need to get back quickly. You may make some quick returns, but investing is usually a long-term aim.
Keep your expectations low early on, but see if you can make a little money in around a year, and then go from there. You could have fun learning about whisky and make a tidy profit over the years.
Remember to start small, stay realistic, and resist the temptation to “sample” too much of your own stock!
*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.
Very interesting. I already enjoy whisky so maybe investment is the way forward.
I think I have a plan for my friend’s birthay present. A bottle of whisky and whisky investition 😉
Definitely agree with whisky as the way forward. Check out the Scotch Malt Whisky Investment & Enjoyment guide by Michael Ross on Kindle
And now on amazon’s createspace in hard copy too