If you see an investment opportunity with a high return that feels almost too good to be true, it’s a clear indication there’s a lot of risk involved too. These types of trades can double your money and then some, but not every investor is built to handle the pressure. If you’re still reading, then you’ve got what it takes, so here are four opportunities for investors with a high-risk tolerance.
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Options Trading
If you’re an investor that enjoys analyzing the market and timing movements right, option trading can be a great opportunity to make big money. An options contract sets an agreed price for an underlying asset that’s to be bought in the future. Option sellers have to stick to this price, but buyers have time to consider their choices and walk away.
If the asset value increases before the future date, the trader can bring in a large profit. However, when the market doesn’t flow as predicted, there can be enormous losses involved because of how much leverage is often used. Before dabbling in this financial mechanism, read up on buying and selling options strategies to make sure you’re 100% comfortable with the process, risk, and reward.
Venture Capital
Startups often seek investments from venture capitalists. This partnership can help the startup grow into a successful business while bringing in a steady profit for the investor. Even though the reward can be enormous, many startup businesses fail because they’re operated by people with amazing ideas but zero business sense. Therefore, make sure you do your own research (DYOR) before investing in a venture capital fund.
Initial Coin Offerings
Cryptocurrencies are an alternative asset that has turned regular investors into millionaires, but this is far from the case with the majority because of how volatile the market is. However, there is a lot of promise in the market. For example, many crypto projects run initial coin offerings (ICOs), which allow early investors to buy native coins at a lower price than they will launch on an exchange.
If the project does well and attracts plenty of ongoing community support, early investors will see an enormous profit. However, there are many risks to consider including failed projects, pump and dumps, and rug pulls. Therefore, as with any investment opportunity, it’s essential to DYOR first and be willing to lose everything.
High-Yield Bonds
Regardless of who issues a high-yield bond, they have the potential to bring in an eye-watering amount of profit, so we already know there’s a lot of risk involved. In many cases, these types of bonds offer 15-20% on the investment, but they’re often bogus bonds that are doomed to fail. However, buried among the thorns you may stumble across the one truly lucrative high-yield bond, making them attractive for investors.
Risk-tolerant investors benefit from earning huge profits, but they also suffer enormous losses. To be successful with the above opportunities, it’s important to learn how to truly weigh up the worthiness of an investment.
