The Alternative Investment for the Future
The Alternative Investment for the Future
Beginning in 2020, investors faced turbulent markets for investments once thought to be safe, first-time investors approached the market with scepticismfor the established methods, and both groups began to give serious consideration to alternative investments. Whiskey & Wealth Club propose an option that brings together the best of the traditional and non-traditional: cask whiskey.
The world of alternative investments is booming. Crypto has been the choice du jour for many young investors, but as those who have put money into the market themselves (a contingent to which you yourself may belong) will tell you: it can get chaotic. New coins and tokens are being developed every day, and values can shift rapidly based on anything from rumours to randomly-deployed memes.
Sure, cryptocurrency has its appeal. It sits outside of traditional markets, and investors have been able to see considerable returns. But those returnscan come at a significant risk. Cryptocurrency can be difficult to track, and little is known about longer-term returns at this time. And that’s to say nothing of the environmental impact of mining these currencies!
At the same time, traditional investmentshave seen declines or entered periods of high volatility. While pensions were once seen as a stable investment with fairly good returns, many have seen marked decreases in these returns since 2008. When it comes to longer-term investments, Stock & Share ISAs can be better options than normal ISAs (the idea being that a longer investment term can balance out potential market fluctuations), but these too are not seeing the performance they once did.
Enter cask whiskey.
Part of an established luxury market yet not tied to other financial markets, cask whiskey has become a forerunneramong alternative investments for a reason. Unlike cryptocurrency, cask whiskey is backed by a tangible asset. Investments outside of established markets can be seen as more risky, but cask whiskey is an asset-backed investment, which carries less of this risk.
When you invest in cask whiskey, you assume full ownership of the cask itself. During the term of your investment, this cask is stored securelyin government-bonded facilities as it matures. The market for cask whiskey is well established and demand has been stable for a number of years. Barring a major unforeseen event, it is unlikely that the value of a cask of whiskey will decrease; it is far more likely that it will see increases in value each year after the third year.
These increases are driven by three factors: scarcity, age, and brand. As a result of the COVID-19 pandemic, distilleries produced less new spirit in 2020 and 2021 than in previous years. Therefore, stock from this time is scarce, and distillers are less likely to have had surplus to sell to investors as they were not distilling to production capacity. Securing casks from either year may be difficult, like getting your hands on gold dust, but the lucky few who do may see significant returns on their investment in the next decade as distillers look to top up depleted stocks.
While an older cask will tend to be worth more than a younger one, branding and scarcity play significant roles in determining the cask’s value.Two ten-year-old casks may both see increases from their initial values,but a cask produced by a master distiller for a particular premium brand in a small batch has a greater chance of seeing exponential increases than a cask mass-produced to become spirits for any brand.
Branded casks are intended to be bottled by the brand themselves once matured. Distillers may sell a limited number of surplus casks to offset production costs, but these sales are generally accessible only by wholesalers. Whiskey & Wealth Club offer investors the exclusive opportunityto invest in these branded and rare casks and therefore provide our clients with the opportunity to receive a greater return on investment in the future, than if you were to invest in a mass produced, non-branded cask.
Whiskey & Wealth Club have cultivated relationships with renowned distilleries to offer clients the best potential for future returns.
Whiskey & Wealth Club not only have access to these distillers’ casks, they’re also able to purchase them at wholesale rates and pass these savingson to clients. Additionally, without the overheads the distilleries carry, Whiskey & Wealth Club can offer clientsa far better opportunity than going to the distilleries directly.
The value of rare whiskey bottles has increased by 478% in the past decadeas stated in the 2021 Knight Frank Wealth Report. As collectors clamour for rare bottles and whiskey increasingly becomes the drink of choice for young connoisseurs, demand is expected to outstrip production if both continue at the same rates.
Investing directly in cask whiskey puts you ahead of the curve. When the time comes to exit your investment, you’ll have an array of attractive options available to you. Whether you choose to sell your whiskey back to brands or distilleries to bottle the contents of your casks under a private marque or sell them at auction, your Specialist at Whiskey & Wealth Club will work with you to understand your goals and aspirations and help you devise the exit strategy that will help you achieve these at industry rates – and make the most of your returns.
To explore your options and learn more about investing in cask whiskey, visit whiskeywealthclub.com.