How Investors Can Stay Safe In The Cask Whisky Market

How Investors Can Stay Safe In The Cask Whisky Market

Cask whisky hit the headlines recently thanks to unscrupulous firms offering impossibly high returns to seduce unsuspecting investors. According to whisky industry magazine Cask and Still, some companies had offered guaranteed returns which were many times higher than typical profits on other luxury investments.

This raises the crucial question of what investors can do to protect themselves while also making the most of this attractive alternative investment opportunity. We spoke to whisky expert and Tomoka Casks co-founder Jass Patel to get his insider tips on staying safe in the cask whisky market.

“You really need to know what you are doing when it comes to any type of investment, casks included. It is a very busy market and companies will spout all kinds of figures to lure you in.

Before you enter the cask whisky market for the first time, I recommend taking a moment to consider your motivations. There are a great many reasons why people buy into the cask market. It might be for portfolio diversification, to acquire investment-grade whisky, or simply for the love of the liquid and the opportunity to buy your very own piece of your favourite distillery.

When talking to a cask broker you will need a clear idea of your financial goals and expectations. Some brokers will try to sell you casks which have been purchased in bulk. This usually means those casks will be less valued in years to come and will be sold predominately for blended whisky. There’s nothing wrong in that at all, but you should be aware that you are investing in a very basic cask with lower levels of return.

If you are seeking to buy into investment-grade whiskies, then you will be looking to buy casks that are older and come from iconic distilleries such as Springbank, Ardbeg, Laphroig, and Bowmore, to name a few. These casks are very limited in supply and naturally command a higher price.

A middle ground would be to invest in casks from marquee distillers that are younger than 15 years and have a really good yield. These casks are quite flexible in terms of exit because you can bottle them or sell them on further down the line. The age of the cask is important at this stage so you know whether the value is worth it and you are not simply paying for the name.”

Our whisky experts are always happy to answer any queries you might have about investing in whisky. Please contact us at info@tomokacasks.com.

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