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09.03.21

How to Pandemic Proof Your Investments in 2021

You don’t need to be a financial expert to know that we are living through turbulent times in the world of investments. Covid-19, Brexit and the political instability in the USA have all sent shockwaves through the markets and caused investors headaches, losses and sleepless nights. So how can you pandemic proof your investments and come out of this situation better off than you went into it?

The simple answer is to invest wisely, which means safely. There have been signs recently that the markets are growing again after last year’s shocks, but there are also warnings that this may only be a temporary bubble and that current stock prices will tumble if vaccinations don’t bring the kind of economic rebound the world needs this year.

Much of the current positivity is based around the vaccination programmes and the hope that they will return life to pre-Covid normality. But last year we also saw the impact that bad news could have on the markets.

The FTSE 100 rose last summer as infections fell, and then dropped back when the UK officially went into a recession. It fell again as the infection rate began to creep back up and new lockdowns came into effect in autumn and winter. With new strains still spreading and causing further uncertainty, there’s no guarantees 2021 will see a smoother ride.

Time to jump off the Corona-Coaster?

So how do you pandemic proof your investments? With so much that we can’t predict about the markets and what this year will bring, it’s definitely the time to look for investments that won’t be affected by this chaos. This means assets that will hold their value, no matter what restrictions or recessions might be going on around them.

Gold has traditionally been the safe haven of choice for investors, but even that was badly affected last March when Covid threw the world into lockdown. Despite that, its reputation for stability saw it rally in the summer and end the year up 22% in value.

Another asset that is earning a great reputation for being a safe port in a storm is Scotch whisky. As a drink it’s enduringly popular and still growing all around the world, with the latest stats on exports showing that sales worldwide were up 4.4% in 2019. That makes it a big and growing marketplace, even during a pandemic.

Investing in whisky

But what makes whisky such a pandemic proof investment? For one thing, it’s its longevity. Whisky is a drink that plays the long game, with older whiskies usually more valuable than newer ones, so most of the most valuable whiskies out there right now pre-date the pandemic by decades.

A 75-year-old bottle of Macallan isn’t affected by lockdowns or people working from home or a lack of consumer confidence in the property market. It’s a 75-year-old Macallan and it’s worth a fortune because it’s a collector’s item and an incredible drink.

Investing in new make whisky casks is just as unaffected by the pandemic because the whisky will be maturing and growing in value all the time. If anything, the break in production across the industry in early 2020 may make newer whiskies more valuable for their comparative rarity. 75 years from now, how much will a whisky produced in lockdown be worth?

That doesn’t mean you’ll need to wait that long to get a return on investment though. A report showed that if you invested $100,000 in whisky casks in July 2018, that would have been worth $160,000 within two years, and there’s been no signs so far that the pandemic has done anything to change that kind of growth in value.

So if you really want to pandemic proof your investments, there’s only one way to go.