Hourclassic.com Reviews Hour Classic, Another Risky Investment

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8 High-Risk Investments That Could Double Your Money

When an investment vehicle offers a high rate of return in a short period of time, investors know this means the investment is risky.

Given enough time, many investments have the potential to double the initial principal amount, but many investors are instead attracted to the lure of high yields in short periods of time despite the possibility of unattractive losses.

Make no mistake, there is no guaranteed way to double your money with any investment. But there are plenty of examples of investments that doubled or more in a short period of time. For every one of these, there are hundreds that have failed, so the onus is on the buyer to beware.

Key Takeaways

  • Finding an investment that enables you to double your money is almost impossible and would certainly involve taking on risks.
  • However, there are some investments that might not double your money, but do offer the potential for big returns; while they provide risk, the risk is manageable, as they are based on fundamentals, strategy or technical research.
  • They include the Rule of 72, options investing, initial public offerings (IPOs), venture capital, foreign emerging markets, REITs, high-yield bonds and currencies.

The Rule of 72

This is definitely not a short term strategy, but it is tried and true. The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself.

For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72/10) = 7.2) to grow to $2. In reality, a 10% investment will take 7.3 years to double ((1.10^7.3 = 2). If you have the time, the magic of compound interest and the Rule of 72 is the surest way to double your money.

Investing in Options

Options offer high rewards for investors trying to time the market. An investor who purchases options may purchase a stock or commodity equity at a specified price within a future date range. If the price of a security turns out to be not as desirable during the future dates as the investor originally predicted, the investor does not have to purchase or sell the option security.

This form of investment is especially risky because it places time requirements on the purchase or sale of securities. Professional investors often discourage the practice of timing the market and this is why options can be dangerous or rewarding. If you want to learn more about how options work, read our tutorial or sign up for our Options for Beginners course on the Investopedia Academy.

Initial Public Offerings

Some initial public offerings (IPOs), such as Snapchat’s in mid-2020, attract a lot of attention that can skew valuations and the judgments professionals offer on short-term returns.   Other IPOs are less high-profile and can offer investors a chance to purchase shares while a company is severely undervalued, leading to high short- and long-term returns once a correction in the valuation of the company occurs. Most IPOs fail to generate significant returns, or any returns at all, such as the case with SNAP. On the other hand, Twilio Inc. (TWLO), a cloud communications company that went public in June of 2020, raised $150 million at an IPO offer price of $15 a share.   In its third day of trading, Twilio was up 90 percent and by mid-December was up 101 percent. 

IPOs are risky because despite the efforts make by the company to disclose information to the public to obtain the green light on the IPO by the SEC, there is still a high degree of uncertainty as to whether a company’s management will perform the necessary duties to propel the company forward.

Venture Capital

The future of startups seeking investment from venture capitalists is particularly unstable and uncertain. Many startups fail, but a few gems are able to offer high-demand products and services that the public wants and needs. Even if a startup’s product is desirable, poor management, poor marketing efforts, and even a bad location can deter the success of a new company.

Part of the risk of venture capital is the low transparency in management’s perceived ability to carry out the necessary functions to support the business. Many startups are fueled by great ideas by people who are not business-minded. Venture capital investors need to do additional research to securely assess the viability of a brand new company. Venture capital investments usually have very high minimums, which can be a challenge for some investors. If you are considering putting your money into a venture capital fund or investment, make sure to do your due diligence.

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Foreign Emerging Markets

A country experiencing a growing economy can be an ideal investment opportunity. Investors can buy government bonds, stocks or sectors with that country experiencing hyper-growth or ETFs that represent a growing sector of stocks. Such was the case with China from 2020.   Spurts in economic growth in countries are rare events that, though risky, can provide investors a slew of brand new companies to invest in to bolster personal portfolios.

The greatest risk of emerging markets is that the period of extreme growth may last for a shorter amount of time than investors estimate, leading to discouraging performance. The political environment in countries experiencing economic booms can change suddenly and modify the economy that previously supported growth and innovation.

REITs

Real estate investment trusts (REITs) offer investors high dividends in exchange for tax breaks from the government.   The trusts invest in pools of commercial or residential real estate.

Due to the underlying interest in real estate ventures, REITs are prone to swings based on developments in an overall economy, levels of interest rates and the current state of the real estate market, which is known to flourish or experience depression. The highly fluctuating nature of the real estate market causes REITs to be risky investments.

Although the potential dividends from REITs can be high, there is also pronounced risk on the initial principal investment. REITs that offer the highest dividends of 10% to 15% are also at times the riskiest.

While these investment choices can provide lucrative returns, they are marred by different types of risks. While risk may be relative, these investments require a combination of experience, risk management, and education.

High Yield Bonds

Whether issued by a foreign government or high-debt company, high yield bonds can offer investors outrageous returns in exchange for the potential loss of principal. These instruments can be particularly attractive when compared to the current bonds offered by a government in a low-interest-rate environment.

Investors should be aware that a high yield bond offering 15 to 20% may be junk and the initial consideration that multiple instances of reinvestment will double a principal should be tested against the potential for a total loss of investment dollars. However, not all high yield bonds fail, and this is why these bonds can potentially be lucrative.

Currency Trading

Currency trading and investing may be best left to the professionals, as quick-paced changes in exchange rates offer a high-risk environment to sentimental traders and investors.

Those investors who can handle the added pressures of currency trading should seek out the patterns of specific currencies before investing to curtail added risks. Currency markets are linked to one another and it is a common practice to short one currency while going long on another to protect investments from additional losses. Currency, or forex trading, as it is called, is not for beginners. If you want to learn more, check out our tutorial or take our Forex for Beginners course on the Investopedia Academy.

Trading on the forex market does not have the same margin requirements as the traditional stock market, which can be additionally risky for investors looking to further enhance gains.

WhiskyInvestDirect Reviews

23 • Excellent

Write a review

Write a review

Reviews 23

Easy way to start investing in whisky

Easy way to start investing in whisky. For a beginner like me the platform is quite intuitive and their support works pretty well.

Easy way to invest in bulk buy whisky

Easy way to invest in bulk buy whisky. In the 4 years I’ve used the site I’ve had no problems. Really informative about different types of whisky, blended and single malts. Offers a wide range of distillers to choice from. Easy buy and sell, either through their automated process or bid and sell yourself through their online auction. I plan to use the site for some time to come.

I am very pleased with the personal…

I am very pleased with the personal customer care. The solution to solve my transfer’s problem was personalized, fast and effective. After this interaction, I feel comfortable investing in WhiskyInvestDirect. Thank you for your professionalism.

Slainte!

I have used Whisky Invest Direct since its inception. I find it an easy and exciting way to buy and sell whisky. I have always found this company to be extremely helpful and conscientious in the way they conduct their business. They have a vast knowledge of the whisky industry which is reassuring when investing in such a commodity. I am confident my investment is in safe hands and you can’t ask for better than that.

PROFESSIONAL

PROFESSIONAL, SERIOUS, COMPETENT

Review of WID

Here is my personal review of WID…
I am no whisky expert and as for the economics of the industry I am very much a novice.
Now is as good a time as any to discuss my review especially during the turbulent times of the general markets…

-It was because of Bullionvault that I became aware of WID. I still am a customer of BV and it is a good service.

-I began buying whisky on WID in 2020 Oct.
Up to earlier this week I was happy with the monthly rate of return. And then the stock markets tanked…
I am still in the profit although a sizeable chunk of my gains is gone. One thing is sure, if you are considering investing in whisky it must be for a medium to long term. You will not make a fast buck here!

WID
The Good:
Very transparent on buying and holding your whiskies.
Customer service.
Simple website to use.
Simple exchange board just like BV.
Trustworthy.
Site security.
Reliable.
Email correspondence

Things I think should be included on the home portal once you log in:
Total whisky stock levels as against your purchased stock. (Increase/decrease in stock, angel share, etc) Included yearly graphs
Last 10 trade details of your bought whisky. ie who else has bought or sold it, amount and when. The website supplied graph does help.
General market depth of your bought whisky
The ability to trade in different currencies. Euro, CHF, etc
Possible whiskies outside of Scotland?

Overall I am giving a 3/5.
I believe that they are a good company. Since I expect to wait for at least 5 years before I do any selling, I will patiently wait as to how my investments progress. If it goes as I hoped then I will improve my rating. I do expect general market volatility for some time. How this affects the growth of whisky, we are about to find out.

Best of luck to all,
Patrick

Great company to invest through.

I`ve been investing with these guys now for over two years, ( in fact as I write this the FTSE is plummeting). Yet my investments with WID keep I`m going nicely in the right direction. Buying and selling is so easy, with an amazing amount of information on all the different stock lines on the platform.
Whenever I have rung them about anything the phone is always answered very quickly, and they always have as much time as you need with them to answer any questions.
I know there have in the past been a few “Whiskey Investment schemes” out there, which I would not touch with a bargepole! But these guys are amazing, and I feel 100% confident that my investments are safe.
Plus if you buy some of their own Whiskey advertised on the platform, you will appreciate they know a thing or two about the business!!

What’s not to like?

Whisky Invest Direct is a really user-friendly investment platform. The website is very well-designed and easy to navigate. The staff are always available and helpful. What’s not to like? Oh, and I forgot, our investments are doing very nicely thank you.

Very happy with the services of WhiskyInvestDirect

The platform is very interesting and it has helped me a lot in understanding the whereabouts of whisky production and its impact in dynamic markets. I am slowly understanding how everything works within the platform, and I am receiving a lot of precise help from a well-devoted Customer Service which responds in less than 24 h in 98% of the cases. Moreover, when facing important issues, things are resolved quite fast and without many important concerns, and therefore clients feel very relieved when having their money sent to WhiskyInvestDirect. I am very happy with my decision to join here as an investor, and will continue investing hopefully for a much much longer time.

Many thanks to Michele

I thank the support received from the assistance and in particular to Mr. Michele Tedde who with patience, perseverance and sympathy greatly helped me in solving my problem, despite some cumbersome and obsolete rules that apply to your site.
Cesare Fauni

Easy to use, only good experiences

Have been invested in WhiskyInvestDirect for 3,5 years now with

10.000 EUR. Website works very reliably, trading is easy. Apart from the bank’s charge for paying money from my EUR account into their GBP account, there are trading and storage fees, and it would be strange if there were none – after all, they must live too; and I hope they can continue to do so for a long time. After all these fees, my net (!) returns still are more than 9% per annum so far. Cheers mates!

Bank Transaction As Smooth As Single Malt

A very smooth transition between bank accounts made easy with the help of Michael at Whisky Invest Direct.

Excellent customer service

Excellent customer service – they really take care of me well.

highly professional

Great Idea – But the fees make this otherwise great investment opportunity a massive Rip-Off

The storage and insurance fees on new stocks of grain whisky amount to 15% of your total investment every year. That’s right – EVERY YEAR. AND, they charge 1.75% commission on every trade, so that’s a 3.5% spread. And there are number of other ways the folks at WID stick it to you. It’s the extortionate tariffs which make this otherwise safe investment highly risky. The idea is great – but the service itself is a gigantic ripoff.

You’re right – investing in maturing Scotch whisky can seem costly, and the fees charged by other providers will eat up any gain you might make. But that’s exactly what WhiskyInvestDirect fixes.

Including all costs, WhiskyInvestDirect cuts the price of investing in half compared to the very cheapest ‘cask ownership’ programme. Compared to most such schemes, it reduces your total outlay by 75% or more. https://www.whiskyinvestdirect.com/about-whisky/cask-whisky-programmes-compared

If you just compare our charges against digitized financial assets like stocks and shares, they may look high. But that’s because storing a physical asset securely and correctly is fundamentally different from holding stocks and shares. Storage costs are of course fixed, because maturing 1 litre of spirit takes the same space and care as any other. The fee of £0.15 per Litre of Pure Alcohol per year might look high as a percentage of value for immature spirit, but you should expect that rate to decline as the spirit matures into whisky, rising in value as it ages. Our storage charges also include the cost of insurance. Again, it is just a fraction of what you’ll pay to try and access this market elsewhere.

See all fees listed on our Tariff page:
https://www.whiskyinvestdirect.com/help/tariff.html

Past performance is no guarantee of the future, but adjusting for inflation and accounting for all costs you’d expect to pay using WhiskyInvestDirect, maturing Scotch whisky has averaged net returns of 8.2% per annum over the long term. Learn more here: https://www.whiskyinvestdirect.com

See genuine examples from real accounts held on our platform here:
https://www.whiskyinvestdirect.com/about-whisky/whisky-investor-account-examples

If readers of this review and our response have any questions, please contact us via the channels listed below.

The WhiskyInvestDirect Team

Phone
UK and International: +44 (0)20 8600 0135
Opening Hours: 9am to 5:30pm (UK), Monday to Friday

Good experience and good way to diversify investments

My experience with WhiskyInvest has been great so far. Over about 2 years, after costs, my return is about 11% p.a. That’s better than the P2P lending companies that secure their loans on property. I believe that you also own the actual whisky so it’s safer than having to go to court to reposses assets if a borrower doesn’t pay.

Augmentum Fintech is an investment trust that owns a stake in WhiskyInvestDirect. They do meticulous research and due diligence before investing in a company, so their investment helps to reassure me that this is not a Ponzi scheme (although you can never be 100% sure, so spread your risk, diversify and don’t put all your eggs in one basket).

Since a lot of whisky is sold abroad then if the Pound falls due to Brexit, the whisky should rise in value, and may be a good inflation hedge as well.

It takes a bit of time to learn about how the website works, but the office is helpful to explain.

The risks are that whisky prices could fall, but I think that’s remote.

Overall I am happy to recommend this company to others!

Thank you for your review.

Just to clarify one point. All maturing Scotch whisky owned by WhiskyInvestDirect users is fully insured.

Evidence of insurance can be viewed here:
https://www.whiskyinvestdirect.com/help/FAQs/FAQs-storage.html#Is-my-whisky-insured

This insurance means that any damage or theft of any maturing Scotch whisky belonging to our users is fully covered.

The WhiskyInvestDirect Team

Phone
UK and International: +44 (0)20 8600 0135
Opening Hours: 9am to 5:30pm (UK), Monday to Friday

7 Low-Risk Investments With High Returns in 2020

Low-risk is a relative term when it comes to investing. The classic risk-free investment is Treasury securities, but even they carry some degree of price risk from changes in interest rates, though the risk of default is slim to none. Additionally, the definition of “low-risk” will vary from investor to investor based upon their circumstances and their individual risk tolerance.

For those looking for low-risk investments, here are some to consider.

7 Low-Risk Investments With High Returns

1. Dividend-Paying Stocks

To be clear, dividend-paying stocks do carry risk as they are still subject to the same factors that impact the stock market. However, among stocks, those that pay consistent dividends tend to be a bit more stable and less volatile than some others.

When investing for dividends, there are two main approaches. Investing for dividend yield is about finding those companies that pay higher dividends as a source of yield. Utilities and some consumer staples generally have higher-than-average dividend yields.

The other dividend investing strategy is dividend growth. There is a group of stocks labeled the Dividend Aristocrats that have increased their dividend payout level for the at least the past 10 years. While their yield may or may not rank at the highest level, these companies tend to be strong performers with solid management.

Both types of dividend investing can be done via mutual funds and ETFs such as Vanguard Dividend Appreciation ETF (VIG) – Get Report or Vanguard High Dividend Yield ETF (VYM) – Get Report .

2. Preferred Stock

Preferred stock is a class of stock issued by companies that tends to act more like a bond than a stock. Preferred shares provide shareholders with a preference in terms of receiving a dividend before shareholders of the company’s common stock. They are also in line ahead of common shareholders in the event that the company declares bankruptcy or liquidates its assets.

Preferred stock is riskier than investing in bonds, but less risky than regular common stock.

3. Corporate Bonds

Corporate bonds are debt instruments issued by companies to raise capital to finance ongoing operations or a specific need such as erecting a new facility. In exchange for investing in these bonds, bondholders are paid interest, usually semi-annually. The face amount of the bond is then repaid when it matures.

Corporate bonds are rated by outside rating agencies such as Moody’s and Standard & Poor’s. These ratings range from AAA down to B and below. Those rated below BBB/Baa3 are considered to be junk bonds and have a higher risk of default.

Bonds have two types of risk:

  • Interest rate risk arises from the potential of an increase in prevailing interest rates. Bond prices move inversely with interest rates so an increase in interest rates lowers the price of your bond.
  • Default risk. If the company who issued the bond should default, bondholders may be at risk to either not receive anything or to receive less than the face value of their investments, in addition to not receiving the interest payments.

4. Treasury Securities

Treasury securities include Treasury Bills, Treasury Notes, Treasury Bonds and Treasury Inflation-Protected securities (also known as TIPS).

These various options have different maturities and other differing characteristics. Treasurys are often referred to as riskless securities and they are, in the sense that they are backed by the full faith and credit of the United States Treasury.

There are the same risks as with any other type of bond or fixed-income security in terms of interest rate risk. The price of these Treasurys will fluctuate up or down based on the direction of interest rates during the period you are holding them. They will be worth the full face value of the security upon redemption.

5. Certificates of Deposit

Certificates of deposit, or CDs, are deposit accounts offered by banks. You deposit the funds for a specified period of time. This accounts are FDIC insured so they are very safe.

CDs pay a specified interest rate over the life of the CD, so there is no uncertainty. This interest rate will not fluctuate based on prevailing interest rates or any other factors.

The downside is that your money is essentially locked up for the term of the CD. If you withdraw the funds early, there are usually penalties. So be sure that you don’t commit funds that you will need prior to the maturity date of the CD.

A good strategy can be to ladder CDs, in other words, have several that are staggered by maturity date. That way there will consistently be some funds maturing that you can use or invest in other CDs or elsewhere.

6. Annuities

Annuities come in a number of “flavors” including variable annuities, fixed annuities, immediate annuities, deferred annuities and others. In all cases, the investor buys into an annuity contract with an insurance company, they will then have several options in terms of how to take their money out presumably in retirement.

Variable annuities have underlying investment sub-accounts that are much like mutual funds and there can be considerable investment risk prior to the time the annuity holder decides to annuitize. Annuitization also comes in several forms, but a common one is a stream of monthly payments for the account holder’s life or a minimum set period.

The benefit is that the stream of payments is guaranteed by the insurance company. This can also be a risk in the unlikely event that the insurance company defaults. There have been a few instances of this over time. The other risk is that annuities can also sometime have very high expenses that are hard to understand but detract from the account holder’s eventual level of payments.

7. Money Market Funds

Money market funds are interest-bearing accounts offered by mutual fund companies, brokerage firms and others. The underlying investments are money market instruments including short-term Treasurys, CDs and other money market instruments.

These accounts have daily liquidity via an online trade or a check.

The risk is that the interest rates are relatively low, and they will fluctuate based on the direction of interest rates. Note the net asset value of each share remains at $1 in most cases, so this isn’t a risk most of the time. Changes in the money market rules in the years following the financial crisis allow some types of money market accounts to “break the buck” and let the NAV fluctuate. Some funds may also be allowed to restrict access to your funds in some extreme cases. It is best to understand any and all such rules surrounding a money market fund you may be considering prior to committing your funds.

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