Amidst the ongoing conflict between Israel and Hamas, investors are seeking refuge from market instability in an unexpected place: whiskey barrels. The economic challenges posed by the war have led to a surge in interest among Israelis to invest in this alternative asset.
MyWhisky, a company specializing in whiskey investing, has reported a growing interest among Israelis looking to diversify their portfolios. According to Eran Levine, CEO and founder of MyWhisky, the whiskey market operates independently of stock market fluctuations, making it an attractive option for investors during uncertain times.
"It's a completely separate market,” Levine emphasized. “And that's what I think makes it so interesting, that we're looking at alternative investments that have very little correlation to the traditional markets that we invest in." He further noted the resilience of the whiskey market during the COVID-19 pandemic, experiencing a more moderate decline compared to stock markets.
MyWhisky's goal, according to the CEO, is to allow everyday individuals to participate in whiskey investing. The company works with registered UK entities, licensed by tax and warehousing authorities, to source whiskey casks tailored to clients' needs. MyWhisky manages the entire investment process, from acquiring barrels to handling ownership certificates, offering a passive investment option.
Levine further explained the theory behind whiskey investing, highlighting the rarity and increasing value of aged whiskey. "We all know that wine, as it gets older, gets better. The same goes for whiskey. But the thing is that it doesn't only get better, it becomes more and more rare. So when we own whiskey casks, and we let them mature, as the time will go by the whiskey will become better and better — it will become more and more rare, and hence will become more and more expensive," Levine elaborated, going on to emphasize the viability of whiskey as an alternative investment, providing a hedge against traditional market risks.
Whiskey investing in Israel's context: A shelter from uncertainty
Levine expanded on the appeal of whiskey investments in Israel, particularly amidst the current state of war-induced uncertainty. The allocation of significant capital towards war efforts and concerns over the stability of the Israeli market, including real estate and stocks, has led many investors to seek alternative avenues.
He noted, "We're looking at some sort of dispersion that might come after the war because a lot of capital is being spent on all the war efforts." Levine emphasized that whiskey investment provides a unique advantage as it is not based in Israel; rather, it's a Scottish whiskey, constituting a separate market unaffected by local inflation or market turbulence.
The geopolitical independence of whiskey investing becomes especially relevant in times of crisis, offering a buffer against potential downturns in the Israeli stock or real estate markets. Levine highlighted the potential of whiskey portfolios to act as a hedge, stating, "If the stock market in Israel goes down, or the real estate market is in trouble because of the shakeup, the whiskey portfolio can hedge against other risks or losses."
Investors are increasingly recognizing whiskey's historical longevity as a market and the potential benefits of profiting from a physical, tangible asset that improves and becomes rarer over time. While patience is key, the investment in whiskey barrels offers a unique opportunity for Israelis seeking both financial gains and a strategic diversification strategy.
As geopolitical events continue to impact traditional markets, the world of whiskey investing emerges as a surprising haven for investors seeking stability and diversification. With its unique market dynamics and the potential for increased demand, whiskey barrels present an alternative avenue for those looking to navigate economic uncertainties. And even if everything goes wrong in the end — at least there will be something to drink.