In times like this when inflation rates are left and right worldwide, investors should be smart about what they’re getting into. Risks are always ther
In times like this when inflation rates are left and right worldwide, investors should be smart about what they’re getting into. Risks are always there with every investment, but if you can afford a risk, the best you can do is to make sure that your investments will turn into huge profits.
Sprinkling high-risk investments into your portfolio is a better idea than going all in on only one venture. Let’s have a look at some high-risk investments that you might want to explore.
Gambling
Let’s get gambling out of the way already. It’s always a long debate about whether gambling is a form of investment or not. Well, the truth is that there’s a fine line between the two, but mostly, investing and gambling have more similarities.
Both involve risking capital in hopes of making profits. The key principle to both is also trying to minimize the risk while you maximize the rewards you can get. However, generally, gamblers have fewer options to mitigate losses and if you’re not doing it right, gambling may not be something you should get into in the long run.
So, if you choose to gamble with your money, be sure that you’re doing it right and you’re being wise. Set a limit and know when to stop. Consider gambling online instead on sites like 10CRIC instead of visiting casinos.
Remember: always try to minimize the risk and costs while you maximize your chances of winning. Gambling online is generally cheaper because of fewer expenses. Going to casino establishments can get pricey, and the money you spend there aside from gambling activities won’t turn into profits.
Venture Capital
Many new businesses these days seek investment from venture capitalists. If you’ve been doing this in the past, you probably already know how precarious this can be. It’s not as simple as believing in a product.
It takes time to fund startups because you need to determine whether the products they will be selling are high in demand. Aside from that, you should also evaluate how a startup is doing business. Check for their management skills, marketing efforts and strategies, and even feasibility.
Typically, startup businesses are run by people full of great ideas who don’t have much knowledge of running a business. Now, that doesn’t mean that these are startups you can ignore.
You can always check what role you can play in ensuring that the business is run accordingly. Overall, carefulness and enough studies and research should be done if you intend to become a venture capitalist.
Real Estate Investment Trusts
You can earn from Real Estate Investment Trusts or REITs with high dividends. Usually, REITs have high dividends because it’s a great way for them to get tax breaks from the government.
If you’ve never done this before, the simplest explanation of REITs is that they can allow you to finance income-producing properties. This is done by you purchasing stocks. So basically, you’ll also be a shareholder in a corporation.
You’ll earn by getting a share of the income produced through your real estate investment. That’s without having to buy or finance a property. This is high risk because the value of a real estate can fluctuate a lot.
That said, it’s also important that you take a look at the industry trends before you include a REIT in your portfolio. What you have to look into will depend on the nature of the business. Thinking of malls? Look into its traffic trends.
Generally, you have to be a forward thinker if you want to invest in REITs. This is best for people with a good eye and foresees what role a piece of land can have in future developments within the location.
Conclusion
These are just some of the most common high-risk investments you might want to get into. While you do have plenty of options, know that adding a high-risk investment to your portfolio isn’t necessary. This isn’t really for everyone.
The risk is high because there is a chance of huge losses. However, you also get a higher chance to get high returns if you do your research accordingly.
That said, you shouldn’t rush into getting high-risk investments. Do some research and make sure you’re knowledgeable of what you’re getting into – be it gambling, startup businesses, or REITs.
Your goal is to make profits and it’s not going to happen if you’re not smart with what you’re adding to your portfolio. And remember, do not put all your eggs in one basket. Diversify that portfolio if you can.
