Tags: whiskey | investors | collectible | buy

Whiskey: A Tonic for Investors With a Thirst for Alternative Assets

By    |   Friday, 21 November 2014 12:23 PM

If you're looking for a very alternative investment, you might consider whiskey — investing in it, that is, not drinking it.

The first whiskey index was created six years ago, according to CNNMoney, and since then top single malts have soared in value by more than 660 percent. That compares with 143 percent for the S&P 500 index during that period.

In January, someone scooped up a bottle of Macallan "M" scotch for a record $628,205 at auction.

"Whiskey as an investment is being driven by an escalating international demand, combined with an ever-decreasing supply of rare and aged single malt," whiskey entrepreneur Stephen Notman tells CNNMoney.

Of course, there are plenty of pratfalls to investing in collectibles like whiskey. First, they aren't necessarily true "alternative" investments. They are often highly correlated to stock prices.

Second, the market for collectibles is frequently illiquid. You might not be able to unload that bottle of booze so easily when the desire or need strikes you.

In addition, alcohol investors need to remember these are investments, not something to pass around the dinner table.

If buying single bottles isn't your cup of tea, you can always invest in the Platinum Whisky Investment Fund, whose portfolio includes more than 3,000 bottles, primarily from Scotland and Japan.

"Our strategy involves focusing on icon brands, silent stills — which are distilleries that have shut down — limited edition selections, and top international whiskeys," Rickesh Kishnani, the fund's manager, tells CNNMoney. "We will be buying and selling whiskeys continuously each year, so it is an active trading fund, not a long-term buy and hold fund."

Experts advise buying collectibles only when you have a passion for the items. Purchase the whiskey because you enjoy looking at it etc., not because you think you can get rich off of it.

Frank Robinson, former director of Cornell University's Johnson Art Museum, makes that same point about art. "You buy something because you love it, and after you love it, you learn what makes quality," he tells Newsmax magazine.

"You buy something beautiful, put it up on the wall and enjoy it. Your children grow up looking at it. Every work you own has its own cluster of associations — who you bought it with, how it moved from house to house. And then you pass it on or sell it."

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If you're looking for a very alternative investment, you might consider whiskey — investing in it, that is, not drinking it.
whiskey, investors, collectible, buy
388
2014-23-21
Friday, 21 November 2014 12:23 PM
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