Whisky Casks or Gold: Modern Investment Safety

With the Wall Street Journal publishing an article today regarding the 1,000 point fall in the Dow Jones, we ask; are investor right in flocking to heaven assets such as Gold, or are there better areas available? 

"Investors around the world retreated from stocks and piled into haven assets including government bonds and gold, reflecting escalating worries that the coronavirus will disrupt the global economy.

The Dow Jones Industrial Average dropped more than 1,000 points, its biggest point decline in more than two years; the yield on the benchmark 10-year Treasury note approached a record low; and gold prices climbed for the eighth straight session to a seven-year high."

An ounce of Gold has risen by £100 throughout February alone. But one asset class has performed better, Whisky.

Gold will always be a great asset to own. Like all other assets it will fluctuate. But a new fill cask of whisky which is equally tangible has something else going for it. Constant maturity. 

The value of Gold rises and falls due to supply and demand. As more investors purchase gold to protect their  capital they decrease the market supply causing the price to rise. But what happens when everyone sells? More gold becomes available and the price decreases. Now, lets compare gold to Whisky Cask Ownership. 

 

A new fill cask of whisky which hasn't undergone any maturation is not consumable. Therefore this is the lowest price a cask can be purchased. 

It will take 3 - 5 years of maturation for the liquor to develop into a consumable whisky which can be bottled by a distillery. At this point a cask is worth more than the raw material it began its life as. 

 

This graph illustrates the maturity of a whisky cask and the rise in value between a 3 - 12 year period.