(247 Wall Street) Diamonds, art, classic cars, and rare stamps and coins are all very well and good, but according to a new report by the London-based international financial consulting firm Knight Frank, smart investors should probably be collecting whiskey.
In the latest edition of its annual Luxury Investment Index, tracking ten different categories in the luxury asset class (an asset class is a grouping of investments with similar characteristics, subject to the same regulations), rare whiskey was the best performer, rising 35% year-over-year in the first quarter of 2019.
The increase was even more dramatic in 2018 — 40% — and the category has risen in value by almost 600% over the past decade.
Whiskey was introduced into the index only last year. Also tracked are art, jewelry, watches, classic cars, wine, stamps, coins, colored diamonds (considered separately from jewelry), and furniture.
The next top performer after rare whiskey was art, with an annual return of 12%, but one specific portion of the wine category, Burgundy, showed a rise close to whiskey’s at 33% — an increase buoyed by the sale of a single bottle of 1945 Domaine de la Romanée Conti DRC at Sothebys for $558,000.
The Asian market is particularly important to the rise of whiskey prices. “Rare whiskey is emerging as the latest alternative asset class to excite high-net-worth investors, particularly those in Asia,” the firm reports. They credit the institution of direct flights between Edinburgh and Beijing as stimulating sales growth of scotch to China.
While scotch is primarily responsible for driving up the value of the whiskey category, Knight Frank adds that there has been a surge in the value of whiskies from other countries, too, including the U.S., Taiwan, and Japan. A bottle of 50-year-old Japanese whiskey sold for almost $350,000 at auction last year.
As valuable as it can be, however, it is worth noting that buying rare whiskey is not among the best investments or strategies to help lower your taxes.