Which investment has the most risk? As we know risk lies at the core of all investments. High return rates on investments are great because you do not need to invest so much money to reach your investing goals. However, mind that the higher return you require, the more risk you have to take to get it. For instance, the lottery is a type of investment that pays an enormous huge rates of return, however the risk of loss is simply outstanding. Investing in stocks is usually safer than putting money in lottery tickets but carry a lot of risk as well.
Therefore most experts say that the popular investments with highest risk are:
– stocks (especially in futures and options – derivatives)
– forex markets
– money market mutual funds
– hedge funds
– goverment bonds of the countries like Greece or Spain
If investors decide to invest in mutual funds, thay usually choose the most risky – the equity funds. They assume that the risk will pay off, because although in theory such funds can lose the most, then in case of stock market boom will give them the greatest profit. Their advantage over the more conservative method of investing is almost overwhelming.
What type of investment has the highest risk and the highest potential rate?
These are investments that are the most volatile and permit a very high degree of leverage (e.g. options and futures contracts). Stocks also carry high risk and yield the high return. Stock market investment being a long term of 5 to 10 years can give you best and safe return. Of course there will be time of ups and down, but if you stick to it constantly, you would emerge as winner. Mind that you can’t make money overnight, nor in 3 months in the stock market.
Purchasing land or property low and selling at a profit has become quite proftable in recent years but also very risky. However, returns of up to 100% are not so uncommon. In this form of investing, the key is to purchase a house below its market value from an owner in the middle of financial troubles or at a foreclosure auction and then selling it after few months.
Among risky investments there are also hedge funds that aren’t even regulated by any government agency. These investments can outpace mutual funds in term of profits and can be very broad or specialized in specific areas (real estate, commodities, public company buyouts).
There’s also emerging market investments that can be just as risky and rewarding as real estate, hedge funds and forex market. Investing in emerging markets is about putting money development projects, companies or corporations located in less developed countries that seek for
Summing up – which investment has the most risk? It’s the one with high risk of loss but unlimited profit.
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