How to Invest in Whiskey

Invest in whiskey today with Vinovest to diversify your portfolio.

Investors seek assets that can deliver solid returns, but not all of those asset classes find their way into the news. While it’s common to hear about the latest stock outperforming the market, alternative investments present hidden opportunities for investors. Most people think of whiskey as a drink, but alternative investing professionals view whiskey as an investment. This article discusses how to invest in whiskey and whether a whiskey investment makes sense for your portfolio.

Why You Should Invest in Whiskey

A whiskey investment provides several advantages for investors who want to embrace alternative investments. Some of the key perks are outlined below.

Market Growth

Investors look for growing industries, and whiskey delivers. The Global Whiskey Market Report projects a 6.26% compound annual growth rate (CAGR) from now until 2027. Consistent, reliable growth in the whiskey industry bodes well for a whiskey investment. 

Returns on Investment

Every investor wants a positive return on their investment, but some investors take significant risks in hopes of making a profit. Investing in whiskey is not as risky as other investments, and you can still generate a respectable return on investment (ROI). The projected 6.26% CAGR from now until 2027 demonstrates the asset’s potential. Building up your whiskey investment now will help you reap more of that ROI, and if you select rare whiskey bottles, you may see even higher returns. Because whiskey has a limited supply, like gold and real estate, it is more resistant to inflation and economic uncertainty.

Accessibility to Investors

Whiskey is accessible to investors and people who want to drink rare brands. Some online investing sites allow their users to buy and sell whiskey. Whiskey investments are more affordable than other alternative investments like real estate. Affordability and online platforms help people invest in whiskey and accumulate large positions.

Historical Performance

Historical performance does not offer any guarantees, but it gives you a gauge of how an asset’s value can change in the future. Whiskey has helped investors beat the stock market and remain a hidden gem for investors. The Platinum Whiskey Investment Fund averaged 17.9% in annual returns from 2014 to 2021 before its planned liquidation. A popular index focusing on rare whiskies, the Knight Frank Luxury Investment Index, appreciated by 564% in the past 10 years, comfortably outpacing the S&P 500. 

3 Ways to Start Investing in Whiskey

As more people explore alternative investing, under-the-radar assets like whiskey can continue their momentum. Here are three ways you can start investing in whiskey, so you are well-positioned for a rally.

Whiskey Bottles

Most whiskey investors buy rare bottles. The scarcity can increase the value quickly, especially as more of these limited bottles get consumed. You should only buy from reputable brands as some people try to pass a fake bottle as the real deal.

Once you acquire whiskey bottles, you’re not done. Effective storage is critical to preserving your whiskey investment so it retains its value. You should store whiskey in a dark setting that does not get any sunlight. Sunlight can cause evaporation and change the color and taste of a whiskey. If possible, keep the whiskey bottle in its original carton to avoid scuffs or cracks. You should also maintain a cool and consistent temperature between 15 and 20 degrees Celsius. High humidity will damage the bottle as well.

Whiskey Barrels

Whiskey barrels require more storage space, but buying in bulk lets you save on the average cost per whiskey bottle. You can store the barrels on your own or have a distillery store them for you. The latter option will increase your costs, and you’ll have to find a trustworthy distillery in your area.

Whiskey Stocks and Funds

Whiskey stocks and funds are the easiest ways to get started. You can invest in index funds that hold a collection of whiskey stocks or buy individual securities. You can get exposure to a company that profits from whiskey, but you also have to look at the company’s earnings and revenue growth. These companies stand to appreciate when whiskey increases in value, but some laggards can underperform rare whiskey bottles. Some funds give more exposure to whiskey bottles rather than companies that sell whiskey.

Diversifying Your Portfolio with Alternative Investments

Investment whiskey can help you earn strong returns and outperform the market. The alternative investment is growing in popularity as more people recognize the beverage’s potential as an asset. Investing in whiskey can make sense for investors seeking portfolio diversification and not becoming too dependent on the stock market’s performance.

Investing in whiskey and other alternative assets isn’t easy. These assets get less media coverage and require more insider knowledge. But you don’t have to approach alternative investments alone.

Frequently Asked Questions