Since the launch of our cask ownership program, we have quite a few clients asking us this question, “How do I choose the right whisky cask?” The answer to this question varies from client to client, depending on their needs. In our second article of the series, let us look at choosing the right whisky cask for sales in future.
How to look for a right whisky cask for investments
In a volatile market, more investors are turning to whisky casks as a means of investments. Due to the rising popularity, the whisky cask market moves swiftly and decisively. As an investor, what should you look out for when you buy a cask?
Long-Term or Short-Term Investments
Do I want to sell the whisky cask in the short term or hold for longer?
For a start, an investor should look at his ultimate aim for buying a whisky cask. Is that for long-term or short-term investments? We would define long-term investments as 3 to 5 years or more, and short-term investments in 1 to 2 years. While cask prices do appreciate over time due to the whisky maturation, investors should not be looking at gaining a significant ROI if they intend to sell the cask in less than a year.
Short-term appreciation is also much lower than long-term appreciation, which means the investor must not expect a high ROI. What he can look forward to is a slow but steady increase of his original investment if he keeps investing.
Types of casks
An investor should also look at the type of casks that he invests in. He needs to buy the casks types popular with independent bottlers to sell the cask when he is ready. Spirits Castle can make recommendations by using what we know of the market at the point of purchase, but we cannot guarantee that the information stays relevant when you are ready to sell. Therefore, we would highly encourage you to do your research to find out the whisky cask types that you should buy.
Getting to know the whisky distillery and the type of distillate they produce is crucial. It affects your decision in buying the right whisky cask for investments based on demand. Usually, independent bottlers look for different distilleries in their bottlings but there are some distilleries that are more sought after than others. Investors usually do not ask to taste the whisky as they are not planning on bottling the whisky, so buying the right cask depends on your ability to know the distilleries well. While we can make recommendations, we would still encourage you to find out more on your own.
Age of Cask
Age is all that matters, or does it?
Most whisky drinkers know that age of whisky matters to some and not to others. In whisky cask trade, the age influences the price of the cask directly. For investors looking for short-term investments, it is not always the case that you must buy a higher age cask to gain ROI. Buying a younger cask can still earn you a reasonable ROI as long as you are not looking for a 200% price increase in 1 year. A higher age cask is unlikely to earn you 200% price increase too, just in case you are wondering. The right whisky cask to buy is one that can potentially make you what you aim for.
Knowing your end goal is just as vital as knowing the whisky that you are buying. Spirits Castle provides recommendations and nuggets of information to help you select, but the ultimate decision lies with you. Just like other kinds of investments, a certain level of risk is involved. We encourage you to find out as much information as you can from the materials we will send you at the beginning and from your research.