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26.10.20

Whisky Joins Art and Wine as Covid-Proof Investments

Enjoying the finer things in life is definitely one way to avoid the doom, gloom and anxiety that has settled over much of the world since the outbreak of the Covid-19 global pandemic. Being locked down, unable to go out to bars or theatres or see live sport or music, as well as being isolated away from family and friends means that people have needed to find joy wherever they can.

Whisky, wine and art are all things that people enjoy, for sure, and this has had a knock-on effect on the value of investments in them. Because people aren’t spending money on the things they can’t do, they are still spending it on things like buying expensive Scotch whiskies, fine art and vintage wines, whether to brighten up another dark evening with just a family Zoom quiz to pass the time, or to invest.

Investing in the Finer Things

It’s no exaggeration to say that Covid-19 has caused a lot of turbulence in the global financial markets. Lockdown restrictions and a general lack of confidence in how long ‘the new normal’ will actually last has meant that how people have spent their money has been greatly affected.

With people all over the world losing their jobs as companies go bust and national economies have shrunk dramatically, investors have been desperate for a calm port in the storm. There may be big profits to be made from big gambles right now, but most investors just want to put their money somewhere safe that they know will have a good return.

And three of those things are art, wine and whisky.

Getting Physical

Having a tangible asset always has always seemed like the safest bet for investors in troubled times and it seems like that’s the case now.

For many, art is top of the list for alternative physical investments at the moment, with some favouring it, ahead of antiques and both watches and wines. All solid investments, of course, but most of them come with risks of fakes and forgeries, especially art, antiques and watches.

That’s why investing in Scotch whisky casks is becoming ever more popular.

There’s Never Been a Better Time to Invest in Whisky

Investing in whisky has been becoming ever more popular in the last ten years. Earlier in the year, rare whisky topped the Knight Frank luxury investments index, rising by 564% in value over the last decade.

Meanwhile, the BC20 Whisky Cask Index recently demonstrated that if you had invested $100,000 in whisky casks in July 2018, they would be worth close to $160,000 by the end of June 2020. That’s more than you’d have got from a similar investment in things like gold or Bitcoin.

Lockdown and Covid-19 so far don’t seem to have had any impact on the growth in the whisky investment market or the value of those whiskies. Since January 2019, the projected average annual capital growth rate for whole casks of Scottish whisky has risen by more than 2% and that continues to grow.

That average growth rate is currently at 13%, according to the Whisky Cask Index, which also showed that none of the casks featured had a negative return. This is why so many investors are turning to whisky in the midst of this crisis, confident that while other markets are rising and falling unpredictably, whisky is continuing to grow steadily and strongly.