When most people talk about investing, their goal is to complete alleviate risk while earning as much money as possible.
Although it’s never possible to alleviate risk, it is possible to reduce it if you’re willing to accept a low return.However, what if you’re willing to take on a bit of extra risk for the prospect of a higher return rate?
What do you do then? Well, here are 3 high risk high return investments that you can take part in.
When it comes to high risk, high return investment vehicles, binary options happen to be my favorite. With binary options, you’re not purchasing a stock or bond. Instead, it’s up to you to predict whether the value of an asset will rise or fall over the course of a predetermined period of time.
If you’re correct, you stand to earn rewards as high as 80%. However, if your predictions are incorrect, you stand a chance at losing a large portion, or even all of your initial investment.
While this may seem to be incredibly risky, and is definitely considered to be a high risk form of investment, by doing your research and making educated trades, you can minimize risk while earning incredibly high returns.
Junk Bonds are another favorite, high risk, high return investment vehicle. When most investors think of bonds, they generally think that they’re low risk, low reward. While that assumption holds true when the company issuing the bond has a good credit rating; it’s not always exactly how bonds work. There is a class of bonds that are considered to be “Junk Bonds”.
These bonds are issued by companies with less than good credit ratings, so purchasing them inherently comes with a high level of risk. However, to entice investors into taking the risk, companies that issue Junk Bonds issue them with higher than average interest rates; creating an opportunity for great earnings.
Another one of the high risk high return investments you should at least be aware of is something called speculative investing.
If you take part in this strategy, your goal would be to find incredibly low priced stocks; generally stocks that trade for $1.00 or lower. The idea behind this type of trading is that if you purchase a stock at $1.00 per share and the value of that stock increases by only $0.10 per share, you still earn a 10% return. However, because these stocks are priced so low, and have poor market capitalization, their values tend to vary rapidly; making them a bit more risky than some investors are willing to stomach.
Well, there you have it. If you’re tired of investing in low risk, low return investments that make you wait years to see a sizeable return, the strategies and investment vehicles mentioned above can be your key to quick returns. However, it’s always important to remember that with exceptionally high returns tend to come with an elevated level of risk. So, do your research and always trade responsibly.
Featured image courtesy of Flickr – Ahmad Nawawi