Liquid Investment

Investment CartoonA recent article suggested that investment in single malt was similar to fine wine. The only similarity is that both are indeed alcoholic beverages otherwise that is where their investment characteristics diverge. Whisky suffers from poor liquidity (no pun intended) as it has no exchange like Liv-ex and is usually sold only at auction. The market is much smaller when compared to the $4 billion of the fine wine market annually. Wine from Bordeaux may not be performing as well as it has done in the past but other areas in addition to Champagne that are doing well include Burgundy, the Rhone, Tuscany and the USA. Wine is more tax efficient as you do not have to pay duty, VAT or CGT as it is considered a wasting asset. It is easy to exit the market via Liv-ex and finally you do not need to tie your capital up for 10 – 20 years to see a decent return. We recommend 3 – 5 years.