Have you ever thought about investing in whisky casks?
While it may seem like a slightly unusual investment option, it could be a wise move.
In most portfolios, there’s a place for some alternative assets ― specifically those that may provide a better risk-reward tradeoff. One of the most attractive alternatives is to buy whisky casks and resell them later. The returns from doing this can be astounding, but it’s important to have an effective way of assessing future values since there are no readily available exchanges on which casks can be bought and sold.
People purchase whisky as an investment primarily to relish the tasting experience. However, if you’re looking to make more than just a personal selection, you’ll want to understand more about the whisky market and specifically how it’s trending. So we’ve compiled here a simple guide for beginning whisky investors.
- Get a Deep Understanding of Whisky Cask Investment
Whisky gets better with age. And the longer it stays in the barrel, the more flavourful and valuable it becomes. It’s a bit of a paradox but whisky actually gets better when you take it out of the barrel.
It is tempting to think that the aging process stops once whisky is bottled, but this is not the case. Any appreciation in value will be solely dictated by changes in demand for the particular release. For this reason, the purchase of casks offers a far more compelling investment opportunity than simply buying bottles. By holding whisky casks, investors can realize dual channels of price appreciation in order to achieve maximum returns.
- Asses a Different Perspective
The late Richard Feynman once said that you are always the easiest person to fool. When you are considering a purchase, you tend to take its benefits at face value—unless you know better!
To begin with, whisky does not generate profits, but it does generate value. A cask of whisky may sit in a warehouse for several years, growing more valuable as time passes, but you will not be able to withdraw any funds from it annually. Second, whisky casks are an investment that pays dividends over time. When you buy a younger cask of whisky, you can’t expect to sell it for a profit until you’ve aged it a few years. Thirdly, if this were conceivable, why wouldn’t they take out a loan at 5%? Or, why doesn’t pension fund money invest much in casks?
You can make money on a short-term investment by purchasing an older cask of whiskey, but this is a risky move and you are just as likely to lose value in your barrel owing to rapid evaporation and a decrease in alcohol content – particularly if you overspend. The best way to make money is to invest for the long term.
Consider doing a comprehensive background investigation and requesting documentation to support the company’s claims if it promises you astronomical yearly returns. If they are unable to give any, then you should walk away.
- Buy Young, Sell Old
We like to think of “Buy Young, Sell Old” as the motto when it comes to purchasing casks of whisky. If you buy a young cask at the appropriate price, you will get a greater return when you decide to sell it than if you overpay for it initially. Presumably, this is true of any investment, but for casks given their short lifetime and unbalanced market, it is more crucial.
So how can you be certain that you are originally paying the correct price?
Whisky barrels are part of a lopsided exchange. It’s easy for a buyer to pay too much for one.
The Internet has been a major democratizing force, leveling the playing field for many markets. However, this is impossible with barrels of whisky. The value of these barrels is tricky to ascertain because so many factors affect their worth—a fact that makes it difficult for consumers to figure out what’s a reasonable purchase price. To protect yourself from buying overpriced casks, you need to work with reputable businesses and ask your questions before placing an order.
Want to know the true value of your whisky? We’ll tell you.
Invest With Us — Whisky Cask Club!
At Whisky Cask Club, we believe that everyone should be able to enjoy a dram. Our mission is to bring whisky to everyone, so we started selling casks of whisky because it had become clear that there was a dearth of information available to the public on how to invest in whisky, and that this was resulting in people buying casks that were not suitable for them.
We have long-established relationships with a host of Scottish whisky distilleries — from the highlands to the lowlands in order to provide our customers with the most demanded barrels on the market.
We strive to offer the public with up – to – date details so that you may make an accurate investment decision. We will select barrels from reputable clients that meet your specifications. If you have any questions about the procedure of purchasing casks, please do not hesitate to contact us.