27 Apr 2017

Can investors make money from booze?

Can investors make money from booze?

Scotch whisky can be a very profitable investment compared to the meagre returns currently available from savings accounts, as seen in a latest online sale of the popular spirit.

A bottle of 50-year-old Macallan in a Lalique decanter has just sold for more than £65,000  - a massive jump in value of over 2,000% from the selling price of £3,000 back in 2006.

The whisky is in a crystal Lalique glass and leather case, and the new owner is from Taiwan.

It was sold by Whisky Online, which said the lot's value had been enhanced due to the intricate, hand-blown decanter from  French glassmaker Lalique.

Popular

Whisky from Macallan is very popular worldwide. A six-bottle series, called the Macallan in Lalique Legacy Collection, recently sold for a world record £780,000 in Asia.

One website, Whisky invest Direct, says that, although there are no guarantees, you should expect to profit by selling maturing whisky into normal blending demand, though prices can be volatile.    

The cash price for an eight-year-old Scotch whisky bought new and sold each year of the decade 2007-2016 is said to show average historic returns of 15.2% per annum.

However you would have paid storage fees of 15p per litre of pure alcohol per year, bringing the return down to 11.6% annually. Adjusting for inflation, your 'real' historic return would have been 7.9% a year.

Higher-risk investment

Allan Gardner, financial services director at Aberdein Considine, said buying whisky would fall in the category of higher-risk investments.

These include:

  • Other collectables like art, antiques and vintage wines
  • Commodities like oil, coffee, corn, rubber or gold
  • Foreign currency
  • Contracts for difference, where you bet on shares gaining or losing value

Mr Gardner added: "The right savings or investments for you will depend on how prepared you are to take risks, your current finances and future goals.

"It's important to diversify your investments to ensure your long-term financial objectives are met.

"It's a good idea to have cash invested in a variety of different asset classes."

Investing can take many forms, but most people choose from four main asset classes: Cash in a bank or building society; fixed interest securities; shares; and property.

Independent financial advice

If you are planning your financial future, Aberdein Considine can offer you the support of some of Scotland's most talented and respected independent financial advisers.

Whether you want to buy a property, secure an income for retirement, pay for your children's education, provide for dependents or pass your estate to your family, we can provide you with a high-quality service which is tailored to your lifestyle.

Click here to learn more.


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