Whether you’re looking at whisky bottles, luxury housing, crypto currencies or traditional stocks and shares, 2024 is an interesting time for investment markets. But one thing that’s common between them all, is that you don’t make money by investing at market peaks.
2024 is not expected to be a market peak for the secondary whisky market. Noble and Co’s Whisky Intelligence report stated that for their data set average prices in December 2023 were up 20% compared to the same period in 2022, but were clear that the rise was driven by “weaker demand for lower priced bottles.” For Q4 2023 Knight Frank’s Whisky Index, which looks at 100 of the rarest and most expensive collectable bottles, reported a drop of 9% compared to 2022.
“We expect 2024 may be a year of recovery as bargain hunters seek value,” is one of the key points in Nobel and Co’s report. So if you’re thinking of investing in whisky bottles, or a collector looking to expand their investment, how do you make the most of the current market?
I sat down with Mark Littler, Whisky Consultant and Editor in Chief of The Whiskey Wash, to get him to share his five key tips for investing in whisky in 2024.
1. Embrace Opportunity
“The last time the market was this low was 2020, so use this as a chance to buy good bottles that are going to stay in demand and likely to recover,” is Mark Littler’s first tip for budding or expanding whisky investors.
In April 2024 someone picked up a Macallan Private Eye at a UK based whisky auction for $4,100 (including buyer’s premium), whereas in 2022 you would have expected to pay around $7,000 to $8,000 for the same bottle. It can be scary to look at that data and take a chance, but these periods can be a real opportunity for patient investors comfortable with a bit of risk.
“Macallan Private Eye is a sought after, collectable bottle with a good history. If you look at the trends in value, the recent drop is more of a correction than a market collapse, these are the types of opportunity you need to look for when buying bottles,” Littler continues.
Of course it’s important to know what’s an opportunity with a market correction, and what is a burst bubble. “There’s no easy answer here, other than familiarizing yourself with the data and market history and educating yourself. Which is my tip number two.”
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2. Keep Up To Date With Market News
As with all investments, educating yourself about the market and keeping up with industry news can help you make educated data driven decisions on current and potential purchases. New releases, decisions about industry investments and new markets opening up for a brand will all have impacts on potential. Staying abreast of this information can help you pick the right time to invest, and to exit.
“I started working with the secondary whisky market more than ten years ago, and had already been working with art and antique auctions before that. I have accrued a lot of background knowledge, but I also keep learning. Books, emails, YouTube, websites, whatever works for you is the right way to learn,” explained Littler.
3. Don’t Follow The Herd Too Closely
Mark is quick to explain that his third tip is that it’s just as important not to follow trends too closely. “If your elderly neighbor is casually discussing whether to go for the next XYZ ballot that you’d planned on entering, that could be an indication to step back and review your plan,” caveats Mark Littler. Unless that neighbor is some kind of industry guru of course, but when something becomes mainstream enough that non-experts have become aware of it, that can be a sign that what you’re seeing is a bubble.
In their Whisky Intelligence Report 2024 Q1 Nobel and Co report that the total volume of bottle sales in their data set is down, especially driven by lessening sales of low value bottles. Their Q1 report notes, “much of the trend in the last 2 years has been a rise in volumes at the lower end of the market due to the inability to access stock in the primary market and the high volume of flippers trading the bottles over short periods. As primary stock becomes more available and flippers withdraw from the market, we are seeing a resultant rise in average prices–driven more by mix change than any underlying price increases.”
Which is to say that flipping is not recommended in the current market, and circling back to point two, you’ll need to make assessments about what is undervalued and a good opportunity rather than just waiting for the next (Macallan) ballot.
4. Quality not quantity
“Unfortunately my next point circles back to and relies on that education side of things again, but in my experience it is better to have one solid $3,000 bottle than ten $300 bottles,” Mark said. This is for a few different reasons, partly for the boring old logistics of simply storing large volumes of bottles, but also to do with potential and data when you’re planning your whisky investment.
“Ultimately if you do well and one of your $300 bottles goes up by 20% you’ve made $60, but if you make a balanced, data driven decision on your one $3,000 unicorn bottle, even if it only goes up 5% you’ve made $150,” Mark elaborated.
If you’ve got the budget, it can be good to build a portfolio of a few bottles that balances different price points and risk factors. But if you’ve just a tighter budget, try to stretch to the best bottle you can afford and believe in.
5. Patience
“Bottles give you the flexibility of reacting if things change in the short term, but if you’re new to whisky bottle investing my final tip is to plan an ideal hold of five to ten years,” is Mark Littler’s fifth and final tip for bottle investment in 2024.
Patient investing isn’t something new, it’s been around in mainstream investments for decades, but in the era of apps and constant streams of data it can be all too easy to jump in and out of decisions, often at the wrong time.
Charlie Munger, American businessman, investor and philanthropist is quoted as saying on the importance of patience in general investments, “waiting helps you as an investor and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.” The statement is just as true for whisky bottle investments.
As already mentioned in the quote from Nobel and Co’s report, 2024 is not the year for flipping bottles (which is where you buy sought after bottles at retail then put them straight into auction for a profit). But even if the market looks like it’s going to recover in the next twelve months, data shows that investors make more money when they hold assets for longer periods.
Famous investor Warren Buffett is quoted as saying, “the stock market is a device to transfer money from the impatient to the patient.”
Mark concludes with, “if you want drama, maybe go and buy some crypto currency, although to be honest the same five rules would apply there. Or, if you are really set on short term bottle investment then hammer down on the education side, follow those trends and make sure you’re selling at peaks and reinvesting when the market or specific bottles are low.”
Before You Invest In Whisky Bottles
It’s really important to remember that whisky is like any investment, values can go up and down, so only invest what you can afford to lose.
The Whisky Wash is now owned by Mark Littler, noted British whisky consultant, YouTuber and contributor to Forbes.com, who helps customers buy and sell both bottles and casks of whisky. We will be sharing more information on whisky investment on The Whiskey Wash in the future, but in the meantime if you are interested in reading and learning more about investing in whisky head to marklitter.com.
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