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Investing in the Worlds Most Profitable Whiskies

2017-03-17 23:45 | Network |

 Investing in the Worlds Most Profitable Whiskies
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What’s 89 proof and costs more than half a million bucks?

That would be bejeweled whiskey bottle priced at a neat $6.2 million. While the whiskey itself is said to be rare, entire surface of the bottle is covered with diamonds, the stopper made of white gold and crystal and the name written in red rubies.

And that's not the only whiskey in that price range.

Two years ago in Hong Kong, bidders at a Sotheby’s auction drove the price on a crystal decanter of Macallan “M” Whisky up to $628,205.

While this eyebrow-raising tab — more than the cost of many valuable fine art paintings also sold at Sotheby’s — may make a case of Johnny Walker Black sound like a downright bargain, keep in mind that it’s an anomaly. The world of whiskey (or whisky) has gained a stronger foothold than ever in the luxury market, but don’t expect the best bottles sitting in your liquor cabinet to fetch auction-worthy prices.

So why did the Macallan “M” make bidders swoon enough to fork over the kind of money that could buy a small apartment in London or New York? Don’t discount the value of the crystal decanter itself: holding six liters of whiskey, this hand-blown artifact clocks in at over two feet tall. According to the artisan who created it, the piece demanded 50 hours of labor by 17 craftspeople to finish.

As for the whiskey, choosing the blend itself was a herculean feat. Imagine tasting almost 200,000 whiskies — all aged at least 25 years in sherry oak casks — in order to select the final group of seven that were blended to create Macallan “M.”

Trending: Ultra-Rare Brands

While it’s rare for a whiskey to command such an exorbitant price, this noteworthy Sotheby’s sale points to a trend towards luxury brands in the liquor market. Spirits experts acknowledge that creative collaborations among liquor producers and purveyors of luxury products — say, the “Constantine” decanter made for Macallan by a French glass company — have surged in recent years.

Just don’t get tipsy on the notion that investing in rare spirits is as simple as shaking a martini. Not all liquors are created equal — especially when it comes to market value.

You might be a diehard fan of Kentucky bourbon. Or perhaps you like to pay tribute to your Irish roots — especially on St. Patrick's Day — with a rocks glass of Jameson’s 18 Year Blended Irish Whiskey. Yet when tabulating the most expensive spirits in the world, keep in mind that scotches — the older and more limited the batch the better — consistently rank on top. (And in case you’re wondering, Scotch must be produced in Scotland, or else it’s simply not Scotch.) While most of these bottles won’t cost you as much as a beachfront condo in Hawaii, even the cheapest of the top 50, according to Hong Kong based Whiskey Corporation, break the $1,000 mark.

If you're in the mood for something more exclusive, consider the Dalmore 64 Trinitas. This is a 64 year old single malt containing spirit that dates back to 1868, 1878,1926 and 1939. There are only three bottles in this collection, so it doesn't get rarer than this. According to the Whiskey Exchange, one belongs to its private collection while another one was sold earlier to a private collector from the U.S. The last bottle is up for grabs for £100,000 ($123,700), nearly 64% higher than a year of out-of-state tuition and fees at Harvard Business School ($75,353) — and the whiskey doesn’t come with an MBA degree and free gym membership.

Know the Market

If you’re considering in investing in top end whiskies, get to know the markets. Demand for luxury spirits has especially increased in Asia: it’s no surprise that Hong Kong auctions are fetching some of the world’s top prices per bottle. Since the Whiskey Index was only established in 2007 and while it isn't as old as the wares listed on it, its been high on growth. In the past 10 years, the price of single malt scotches has exploded, the average compounded rate of return per year per bottle is 20.8%. The index is valued at over € 31 million ($33 million) and lists over 61,000 bottles, the oldest dated 1874.

Building a whiskey portfolio takes not only cash, but also willpower. Investment advisers recommend buying bottles in twos: one as an investment, and one to add to your personal liquor cabinet. And while it’s prudent to invest in popular brands, consider seeking out more obscure bottles that add the cache of rarity to your portfolio.

If you’re ready to make a major financial leap into the spirits market, consider the world’s only whiskey investment fund. Launched in 2015 in Hong Kong, the $10 million Platinum Whisky Investment Fund portfolio spans 3,000 bottles with heavy representation from Scotland and Japan. The minimum investment in the fund is $250,000.

Even whiskey fanatics might blanch at that buy in price — after all, for that amount and a little change, you could buy 75 bottles of rare Glenfiddich 40 Year Old Rare Collection Whisky.

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