Cigar collecting as a tool for investment is not what it once was. It’s gotten bigger. There is now undoubtedly a real community in investing in Cuban cigars. With everything from fashion to automobiles to memorabilia developing a passionate collectible industry, cigars have ridden the wave too.
The term limited edition has been all the rage for a while now. Like any luxury item worth collecting, short supply drives up the price of the product. Cigar have made it favorable to make a tried schedule of releasing exclusive cigar lines and short window exhibitions.
This enables them to sell, capture market interest, and generate enough interest to charge hefty premiums while selling out stocks. With an expanding community of cigar lovers and collectors who look beyond simple enjoyment, this also bodes well for the resale market and, by extension, a boon for speculative investment.
Investment in cigars, while growing in notoriety and stature, is still a niche enterprise. A lot goes into making it a successful endeavor. So let’s dive into how to invest in Cigars.
How to Invest in Cigars
With the requisite desire and capital, all you need is an understanding of some essential fundamentals before diving into the world of cigar investing.
The rarer, the better
As with any industry and specialization, getting the lay of the land is essential. You might have already heard of Cuban cigars. The market is skewed in favor of them, especially those made before the 1962 embargo.
Cigars like the Cubano Davidoff that have not been made in decades have immense investment potential. Habanos SA, the oversight entity of the Cuban cigar industry, puts out premium cigar regional releases.
Regional releases from other mainstay players in the cigar game such as Spain, UK, and the far east territories like Hong Kong and Macau are the next best thing. Dominican cigars such as Romeo y Julieta also fetch reasonable prices.
The better the level of care and preservation, the more they are in high demand. They are sold almost exclusively at auctions held in the country of origin. Hence, for you with a pretty penny and a penchant for globetrotting, this can add an extra layer to the allure of acquiring regional cigar classes.
With their short supply and expected appreciation value, they possess an undeniable potential for a good investment.
Know the sandbox
Do your homework on what is going on within the market. Who are the players, what do they do, how do they do it? Make sure you are privy to the rising trends and overarching circumstances. There are several top cigar blogs for learning more about cigars.
Perhaps you have a sizable stock of vintage cigar you wish to offload, is the market ready to give you the returns you want? Is there a global pandemic going on, and purchasing power has slowed? Keep a close eye on the auctions happening and the sums being bandied about.
Perhaps you find that there is an abundance of a specific type of vintage cigar line; hence competition is high.
What to look for at an auction
Knowing things to watch out for at an auction is important. Lest you get swindled for a pouch of quasi magic beans and a prayer. Make sure to inspect the box of cigars you are about to buy for proper retail integrity.
To aid this, always procure your cigar from the cigar manufacturer themselves or a unique cigar shop or auctioneer of good repute. This gives you some satisfactory measure of confidence as it pertains to the authenticity and care taken in the care and maintenance process.
More wholesome and full blends of tobacco are more vivacious and mature better. Most auctions only deal in Cuban vintage cigars and select regional cigar releases. A keen eye is essential. The wrappers can tell a lot; a nice glossy oily veneer with smooth, evenly sized veins is a good sign.
The smell of the filler tobacco is essential too. Cigar aficionados can attest to the unique aromas that help in assessing the quality of the tobacco leaves. The type of wrapper leaf is no small detail. Dark wrapper leaves tend to fetch higher prices and possess a greater appeal at auctions than lighter wrapper leaves.
An argument can be made that Cuban wrapper leaf lends little in the way of flavor and quality, but its visual appeal adds to the prestige and, as such, the price. Do note that while significant auctions are the stomping grounds for Cuban brands, a good cigar can always find a buyer.
Good things come to those who wait
Not many people like to wait. However, that’s what you will have to do. First, with proper maintenance and care, the cigar will acquire enhanced richness and flavor. Furthermore, with time and different developments, the supply of your special set of cigars may get depleted as people consume them.
Keeping your ears to the ground with the word around collectible cigars is critical in this regard. Who knows what it will cost any number of years from now? Age is a number all right, significantly so when you want to maximize your cigar portfolio’s investment potential.
Other tips for investing in cigars are not as convoluted as you might think. Do not smoke them. This may seem elaborate, however, for your financial investment to see itself to the end; you have to curb your desire for a smoked cigar. Even opening the casing can spell doom as the price can take a sharp dip due to a broken seal and an incomplete set. That way, you can have your cigar and smoke it too.