It might feel like we were thrown into another lockdown not long after we’d finished singing Auld Lang Syne this year, but that’s no reason to change your plans if you were thinking of investing in Scotch whisky.
The markets may be back to fluctuating, as the impacts of Covid-19 and its new strains balance out the optimism caused by the creation and roll-out of vaccines. But if 2020 taught us anything, it’s that whisky is an incredibly resilient investment that has managed to maintain its impressive recent growth despite the chaos.
Before the pandemic started, whisky was already proving that it was an alternative investment, that should be taken seriously. According to the Knight Frank Luxury Investments Index, rare whisky had risen in value by an incredible 564% between 2010 and 2020, much more than classic cars (194%) fine art (141%) or even wine (120%).
While last year’s pandemic brought volatility to the markets, the value of Scotch whisky was largely unaffected and it continued to rise.
This is because it’s a tangible product and a finite one at that. No-one can just suddenly create a new stash of 70 year old Scotch whisky to flood the market because all the whisky of that vintage was made 70 years ago. For this reason, whisky is not subject to the reactive swings that have impacted investments in traditional assets like stocks, shares and housing.
Indeed, the exact opposite is the case with production of new whisky being affected by Covid-19. Demand has increased meaning that the supply has become one of the lowest in history. With less whisky being produced right now, if you invest in it this year, you’ll be getting something even more rare as a great investment for the future.
Casks have already proved themselves to be wise investments, with one report showing that if you invested $100,000 in them in July 2018, that would have been worth $160,000 within two years.
Meanwhile, the popularity of whisky (whether as an investment or a drink) around the world only continues to grow. The Scotch Whisky Association’s stats for 2019 show that there’s been worldwide growth in whisky sales of 4.4% up to an incredible £4.91 billion with growth in 106 global markets.
This can only be good news for investors as it adds to the demand for the limited supply of whisky and while the initial impact of Covid-19 saw a 30% drop in exports for Scotch whisky in the first half of 2020, the industry soon adapted to the ‘new normal’, so we can expect to see that rise again for the second half of the year.
So, while the start of 2021 might not have gone the way many of us would have hoped, there’s still reasons to be optimistic and many more reasons to consider starting to invest in cask whisky with Whisky Investment Partners.
What better cure could there be for the lockdown blues?