Get Into Cigar Investing

Over the years, the image of cigars has evolved from just some rolled bundle of tobacco to a luxury and investment that people spend tons of money on. Even world-famous personalities like Cuban revolutionary Fidel Castro and the late British statesman Winston Churchill had been seen in at least one occasion with a cigar in their hands. Cigars have become more than just a puff.

The cigar market is made up of different brands manufactured by companies that rake in a sizeable amount every year. A couple of years ago, one could buy a vintage Romeo y Juliet 10-cigar box for £11,500, which was ten times its estimated cost (£2,225) and almost 300 times its original price (£70).

C Gars managing director Mitchell Orchant says the premium cigars market is valued at several billions of pounds, with the United States and Europe leading the list of top consumers of the product. China is slowly climbing up, allocating £216 million annually, with a 30% growth every year.

In Hong Kong, David Dale of the Dickinson Dees law firm, shares that some people have at least 100,000 cigars in their collections and these are usually passed on to the younger members of their families.

Paul Frasier Collectibles’ Daniel Wade comments that cigars are now treated like wine, a worthy investment that earns more value as time goes on.

How should an investor begin his journey into the cigar market and earn from it?

The business of cigar buying and selling is not as complicated as what most people think. There are cigar merchants, shops, auctions, and other medium where one can go to. In the United Kingdom, C Gars is the biggest cigar merchant today, and they charge a 12.5% fee from their buyers and sellers for every transaction made.

As a cigar buyer, it is crucial that you monitor the movement of your cigar orders. Cigars are delicate; they will dry out in about a week if not stored in the right containers. They should be at your doorstep as soon as possible, in a humidor to keep the humidity levels consistent.

Storage plays a significant role in ensuring an investor’s profit-making. Cigars are very demanding; they need an above average amount of care, attention, and love. They should be kept someplace where the humidity and temperature levels are just appropriate, 65%-70% humidity and less than 25 degrees Celsius. As long as they are stored in a humidor with those settings, they will be fine, whether they are in a big-time merchant’s warehouse or at your homes.

There is one golden rule when it comes to choosing the kind of cigars to purchase: “Stick to Cubans.” Dale believes that due to the Cuban brands’ long and eventful history and credibility, they have earned the reputation of being the highest-quality and most notable among all brands. The Cohiba is a good example.

Alternatively, a potential investor can buy what they call the “UK regional editions,” which are limited edition boxes manufactured by Cubans exclusively for the UK consumers. Only about 300 to 500 of these boxes are produced each time.

The Por Larranga Magnificos (PLM) 2007 and the Ramon Allones Belicosos (RAB) 2004 are now worth twice their original prices at auctions. Furthermore, cigar brands like Punch, Boliver, and Partagas are praised for their wine-like attributes --- they get better with time.

For the richer investors, Dunhill and Cuban Davidoff are the most popular brands. The latter is said to have been valued at £6,000 at last year’s auction, 20 times more than its initial price.

Experts advise investors to keep their cigars for some time, around 5 years at the least, and spend that time looking for a trusted merchant. And always be on the lookout for any used cigar puffed by popular personalities. In 2010, a half-smoked cigar of Winston Churchill cost £4,500, an amount that is about thirteen times its original value.