Business

Top 5 High-Risk Investment Strategies in 2019

Most people invest to make money. It is possible to make a large return on your investment, but high returns are usually associated with high risk. You may even end up losing all of your investment capital in the pursuit of a big payout. But if you need to make money fast or you have a strong stomach for risk, the following investment vehicles can offer large gains.

1. Cryptocurrencies

Cryptocurrencies such as bitcoin and Ethereum are always in the headlines these days. Bitcoin investors have had a rough ride in the last 12 months, but anyone who invested back in 2009 is probably a millionaire by now. Trading bitcoin and other cryptocurrencies is very easy. All you need to do is create an account on a cryptocurrency exchange or open a trading account with a broker that offers cryptocurrency pairs.

Beginners are better off sticking to the well-known altcoins, as there have been a number of cryptocurrency scams in recent years, including insecure crypto exchanges, pump and dump schemes, bogus IPOs, and non-existent coins.

Always use your common sense and practice due diligence when investing in cryptocurrencies.

2. Short Selling

Stock exchange investors make money by trading stocks. Short selling investors make money by borrowing shares from investors, selling them, and then buying them back when the company’s value falls. It’s a strategy often used by hedge funds to make money out of companies they believe to be overvalued. All it takes are rumors of false accounting and dire performance reports for a company’s share value to plummet overnight.

Some would argue that short selling manipulates the market, but there is no doubt that short sellers clean up when big companies are in trouble.

3. CFDs

A Contract for Difference or CFD is a contract between you and a broker whereby you speculate on the price movement of an asset. You are buying an interest in the price of an asset, rather than betting on it. If you are correct, you make money; if you get it wrong, you lose money.

CFDs have been compared to spread betting and they are considered a high-risk investment vehicle. However, as long as you understand the risks involved in CFDs and don’t invest money you can’t afford to lose, you have nothing to fear.

4. Spread Betting

Spread betting is a step up from CFDs. It’s not much different from betting on horses, sports, and anything else that takes your fancy. Like CFDs, spread betting is a leveraged product, so there is a huge potential for making serious profits for a relatively small amount of capital.

Spread betting investors typically bet on the currency markets, commodities, and indices.

5. Venture Capital Trusts

Venture Capitalists (VCs) invest in startups and new companies in the hope of making a lot of money when the company grows. There are tax advantages to VC trusts, but because most new/small companies die a death within five years, a lot of risks too.

Always take professional advice before you opt for high-risk investments, or you could lose more than your initial stake.