Whiskey Returns vs S&P
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Does not follow the stock market
Source: Rare Whisky Apex 1000, SPX
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In the Market
Check out Whiskey in the stock market
Competitive historical returns that aren't correlated with the stock market
Rare whiskey and whiskey casks are real assets with intrinsic value that should appreciate naturally over time. The Knight Frank Rare Whisky Index, which tracks a variety of rare Scottish single malt whiskeys, continued to produce generous returns even in early 2020 when the stock market crashed due to the coronavirus pandemic. Historically, whiskey has offered competitive returns over the long run too. Over the decade leading up to 2020, the index grew 586%—outperforming other popular luxury collectibles like wine, vintage cars and watches. Investing in collectibles does come with a learning curve as well as additional costs and logistical considerations like transportation, storage and insurance. That said, whiskey is easier and less expensive to store than other collectibles like wine and art.
Did you Know
You'll often fetch the best price for your aging whiskey investment on its milestone years: 12, 15, 18, 21, 25, 30, 35, 40 and 50. It's wise to plan your exit strategy accordingly
While Japanese whiskey is new to the scene relative to scotch whiskey, an index of the top 100 Japanese whiskeys has outperformed a similar index of the top 100 scotch whiskeys for the past several years.
Macallan Distillery tends to set most of the records when it comes to whiskey auction sales. Last year, a cask of Macallan 1991 scotch accompanied by a custom-commissioned NFT for a record-breaking $2.33 million. The NFT was created by artist Trevor Jones, who created abstract digital art inspired by the cask.
Can appreciate significantly in value, often outperforming other luxury collectibles and even the S&P 500
Doesn't follow traditional market patterns, making it good for diversification
Easier and less costly to store than wine
Reasons to Invest
Risk of counterfeit products
Insurance costs to consider if building a sizeable collection
Learning curve to understanding the luxury whiskey market
How You’re Taxed
In the U.S., alcoholic beverage investments are taxed as collectibles. You'll pay long-term capital gains taxes on any profit you earn from the sale of whiskey investments held for longer than one year, and the capital gains tax rate on collectibles is a flat rate of 28%. If you sell the asset in one year or less, you'll pay taxes on any gains at your regular income tax rate.