How to build a whisky portfolio?

If you have not read our previous post “Me As A Whisky Investor” , you should do that first before enjoying this post!

Building a whisky portfolio is not different from building a house?. We would like to build a house in which we can live comfortably for many years. A house which is sustainable against any weather☔?. Building a house with vulnerable material might be better for your wallet in the short term?. However, when it’s rainy you should get sufficient buckets ready before your floor gets wet…

Investing in general won’t bring you fast money, but it does bring sustainable money in the long term?. By following this rule we can build bomb proof whisky portfolios??. Nowadays we don’t build houses with only using 1 kind of material. We use stone for walls, we use other materials for the roof for instance. So turning to composing whisky portfolios, we should not only buy Scotch whiskies or solely Japanese whiskies. We should not only buy single casks, but also single malts and blends. The key? to let your money grow by whisky investing is to build a well diversified portfolio. As with building a house every owner can have add some personal taste to the portfolio, like a purple door instead of the usual color brown or 4 windows instead of 3 on the front. But we never see a house without a roof or only 2 walls. Similarly, the owner of a whisky portfolio can add more Japanese whiskies than another investor or adding more blend whiskies to the portfolio of course. But beware that we do not bet on only a few horses??! Whisky investing is not that static of course in which every portfolio has to be identical. The portfolio must suit the owner, the chemistry between the owner and the portfolio must be a nice ingredient for a sustainable marriage with many memorable moments in the future????.

Building a whisky portfolio starts with good research?. Based upon the research we are able to construct a vision where the whisky market will be heading for the coming 6-12 months. Looking forward beyond this time frame is not useful in our opinion since during a year many factors could affect the market. For instance in June 2015 Nikka announced to discontinue all whiskies with an age statement. This was a shock for the whole whisky market, especially for the Japanese whiskies. Everybody was suddenly hunting for Nikka whiskies, but also other Japanese whiskies received a much higher demand. Hence, prices went up dramatically since the supply became lower while the demand became higher. In addition, the prices of Scotch whiskies also rised as whisky investors also anticipated that scotch whiskies, like Macallan, will also follow this plan shortly.

As a beginning whisky investor, don’t start buying the most expensive whiskies first?. This might be the fast and easy way to get much money into whiskies?. At the same time we must be aware of the fact that the more expensive a whisky is the harder it can find a new owner, thus less liquid to trade. Therefore if our portfolio only contains expensive whiskies, we have a higher chance to miss good market opportunities due to insufficient flexibility to generate free cash flow by selling the whiskies. Hence start building your whisky portfolio with affordable (but at the same time hard-to-find) whiskies.

Diversify your whisky portfolio over different countries, distilleries and kind of whiskies??????. Don’t stick your portfolio only to Japan, or Macallan or only single casks. Diversifying your portfolio provides us flexibility and less risk. Sometimes blend whiskies might be less popular than single malts, but this might change quickly in the market. Sometimes it can be rainy for days consecutively, but one day it will be sunny again?. And at that moment we must have an umbrella ready☂.

I repeat this over and over again?: Beware of fake bottles in the market!!! The traditional rule is that if a deal is too good to be true, the whisky might be a fake. But…senior fakers also know this rule and they just set their price slightly below the market to get you hooked. It is hard to distinguish a fake from a real bottle since people also might refill an empty. A proper protection would be to deal with stores and people who have a reliable reputation in the whisky world. After all the whisky market is not that big, people know each other very well.

Beware of fake whiskies!!!

And last but not least… Enjoy whisky investing, enjoy the fun of doing research, enjoy reading articles about whisky. Also a very important tip: make sure that your wife agrees with your purchases too! Buy her shoes? and bags? in advance before you make another addition to your whisky portfolio.

As you have read, we enjoy whisky investing very much! Therefore we are happy to provide advice regarding your whisky portfolio. Do you want to know more about composing a real whisky portfolio in practice? Do you want to know the latest trends? Come to our shop to have a set in our lounge. With a cup of coffee we talk and learn more about the amazing returns of whisky investments?! It is not different from advice regarding which sweater suits you more, is it a black one or is a red one more the trend nowadays…??

The Whisky Investor