Years ago, I did a television interview on an up-and-coming media network. Many of the ads on the network were for gold coins and bullion, and each guest was asked which coins they liked best.
I admit I wasn’t prepared and had never researched gold coins. When asked which coin I preferred as an inflation hedge, I answered honestly and said that I didn’t know which coins would be valuable.
The host pressed for something to say before the commercial break. So, I obliged, answering that the best hedge against an economic catastrophe is a case of Jack Daniels. You won’t be able to split gold coins to trade for bread or ammunition, but a few shots of Jack should get you whatever you need.
I was never invited back to that network.
But I was recently vindicated. The Inside Hook shared a recent article on “Why Investing in Whisky Is Pandemic-Proof.”
An auction should set new records for whiskey (or whisky, depending on where it is produced). One bottle of scotch expected to get a bid of more than $1.2 million at auction. It’s a bottle of The Macallan 1926 Fine and Rare 60 Year Old. It’s believed to be one of just 12 to 14 bottles in the world with that label.
Rare whiskey has a long track record of delivering strong investment returns. Over the past ten years, this asset class delivered an average annual return of 20.4% and a compounded gain of 540%.
Rare Collectibles Deliver Over Time
Invest in Whiskey and Other Luxury Assets for Security
In the time since I recommended Jack Daniels, whiskey did beat rare coins as an investment. Coins averaged returns of 11.3% a year. Gold bullion gained an average of just 3.2% a year over that time.
Of course, whiskey is not the right asset for every investor. It‘s hard to store and requires expensive insurance for storage.
But the fact that whiskey is an investment shows that the current stock market environment might not be as crazy as it seems. There is often a buyer for anything at prices that seem irrational to many.
Those worried about a crash, which is definitely possible, should consider gold, or bitcoin or perhaps whiskey.
Michael Carr is a Chartered Market Technician for Banyan Hill Publishing and the Editor of One Trade, Peak Velocity Trader and Precision Profits. He teaches technical analysis and quantitative technical analysis at the New York Institute of Finance. Mr. Carr is also the former editor of the CMT Association newsletter, Technically Speaking.
Follow him on Twitter @MichaelCarrGuru.