I have read a few articles about using Scotch whisky as an investment, not a primary source of investment though. I was wondering what your thoughts on this would be and if you know of any articles that might help point me in the right direction to start investing wisely. Unfortunately I don’t have the deep pockets to spend thousands of dollars on a bottle.
This email came into my inbox just a couple days after Reader Antoine shared this news item in our Facebook group. The summary is that a recent auction for the 2014 Balvenie 50 year old sold at a £11,400 loss to retail value, that’s a big loss in a single year.
But that’s collectibles for you.
And that’s why I don’t invest in whisky. Or art. Or any other collectible for a financial return.
Whisky falls under the category of a collectible. Collectibles are fun but they all share two things in common that make them terrible investments for me.
First, there is a limited market which makes the illiquid. Real estate is illiquid too, think about how long it takes to sell a house, but at least there is a large market for it.
Second, because they are so illiquid, they are volatile when they do move.
It’s not like the stock market where a particular stock’s price is set by multiple buyers and sellers. This is a single item usually the only one being sold and so the price is affected by a variety of factors independent of the item itself. You could get lucky or unlucky very easily.
I view investing in collectibles a lot like gambling. It’s more about entertainment than it is about making money. No one ever sits down to a blackjack table in Vegas thinking they’ll walk away a richer person. You do it because it’s fun. If it weren’t fun, you wouldn’t do it because you’re probably going to lose money too!
If I haven’t dissuaded you yet… I found this pretty good article that’ll teach you a little bit so you don’t lose all of it!
Do you invest in whisky or other collectibles? Tell us about it. I may not like doing it myself but I love hearing about it. 🙂