High-Risk Investments – Invest in high-risk funds and assets
If an investment product offers high return in a short period of time, investors should keep in mind that most likely this investment is risky, and there is a risk of partial or even complete loss of capital. However, high-risk investments can be considered an investment vehicle that has potential to double invested funds in a shorter period than low-risk investments. Investing in low-risk financial products also doesn’t guarantee future returns, and cannot be considered as a guaranteed way to double or triple your investment.
Most of high-risk investments are always uncertain and mostly driven by performance. Typical high-risk investment product doesn’t offer fixed income or certain interest rate.
Top High-Risk Investments
1. Digital Assets
Digital Assets opened a new era of online investing for both retail investors and global wealth management companies across the world. Digital assets include all industry players of crypto market including cryptocurrencies, crypto exchanges, crypto investment funds, blockchain-powered companies and Decentralized Finance (DeFi) products. In last years, some digital assets have generated outstanding returns to investors. These products have too speculative nature and considered high-risk.
Generally, digital assets have common and industry-specific risks:
- Volatility Risks. Digital Assets are highly-volatile financial products, so you need to be prepared for loss of value and long drawdown when the market is falling.
- Liquidity Risks. Сhoose highly-liquid assets, otherwise it may be an issue to sell your holdings when you need access to your capital.
- Security Risks. Protection of personal data, smart-contracts security, safekeeping of assets and other factors.
It’s recommended to use regulated trading platforms for purchasing and selling digital assets, as they have strong reputation and employ time-tested approach to security, while taking measures to reduce or even exclude market manipulations.
Digital Assets are a new asset class, most of blockchain companies often focus on early-stage technology, so there may be a high risk of business failure and loss of investments. Digital assets have the potential to lose significant value in ways that may seem unpredictable or unlike other types of investment products. For example, Elon Musk’s posts in Twitter social media usually pump or dump crypto market or particular assets, such as DogeCoin, and the entire crypto market is more likely event-driven.
Generally, crypto investors generate return when selling digital assets at a price higher than purchase price. If you are looking to invest in digital assets, it’s recommended to conduct a research to have understanding how they are structured. Physical location of the issuer or individuals issuing the assets is also important part of the research process strived to reduce the risks and make sure that the team has potential to achieve the results.
2. High-Risk Investments in Foreign Exchange
Forex is traded globally in a decentralized market based on buying one currency while selling another. It is mostly traded in the over-the-counter market where brokers and dealers negotiate directly with each other to determine the relative values of different currencies, according to Investright.org.
Anyone can invest in Forex market, but it’s recommended to select the highly reputable Forex broker that has local presence in your region, operates in compliance with regulations of your country and has a brokerage license issued by local regulator.
Risks & Fraud
There is a lot of retail Forex marketing that forces investors to believe they are expert traders. Aggressive marketing of Forex investments is restricted in all developed markets, so such brokers usually operate illegally without required authorisation to provide financial services. Fraudsters usually indicate Forex as a source of unrealistic returns offered to investors, so you should keep in mind that it’s most likely misleading content that has nothing to do with real investments. Learn more about Foreign Exchange Fraud here.
3. High-Risk Funds
There is a wide range of onshore and offshore investment funds that offer high-risk investment products with attractive risk/return potential. Investing with offshore fund may enhance your returns and reduce the costs due to allocation in a tax-efficient jurisdiction with neutral tax policy. If you have no previous experience in mutual fund investments, you may contact financial advisor or wealth manager to find the investment product that matches your investment objectives and risk profile.
The main benefit of asset allocation with high-risk funds is the expertise of portfolio management team involved in growing your wealth. Moreover, the funds always disclose the structure of assets, historical performance and annual reports. Investment offering should contain detailed information on fund’s objective, strategy and financial goals alongside with detailed reporting that is used for analytics by financial advisors, wealth managers and retail investors.
Performance & Income
High-Risk funds usually distribute the income to investors on monthly or quarterly basis. Income distribution frequency is usually indicated in the investment offering documents, such as subscription agreement and offering memorandum. For example, Einvestment Fund offers monthly income distributions. The Fund delivers superior returns since 2018 and offers selection of broadly-diversified segregated portfolios for asset allocation.
The Fund is domiciles in the Cayman Islands and offers tax-efficient investments with focus on diversification and high level of current income. Investment products of the funds offer low investment minimum of 1,000 Euros in addition to paperless access, automated identity v
erification and electronic contracts. The Fund’s investment products suit the investors who are looking for short-term investments for a period of up to 3 years. However, extension of subscription agreement is not restricted for those who seek to invest for the long term. Take a closer look at the Fund’s products and compare investment options before investing.
Top-performing investment product of the Fund has generated over 300% total return since inception. Moreover, offshore allocation with Einvestment is a great choice for expatriates who look for expat investment opportunities with outstanding performance and strong potential to growth.
Invest in line with your values with ESG Funds
Ethical investing and Ethical Funds are now becoming increasingly popular among investors who looks to invest in line with their values and avoid investing in companies that have a harmful impact on the climate, nature, animals, environment and society. Ethical investing is also knows as sustainable investing or impact investing.
Environmental, society and governance (ESG) factors play an important role for modern investors, especially after pandemic year. In addition to investing in a better world, ESG Funds offer high returns and provide access to high-risk investments as well.
Investing in high-risk funds involves a high degree of risk, so investors need to develop portfolio diversification strategy and avoid putting all eggs in one basket when choosing high-risk investments. It’s not recommended to invest more than you can afford to lose when choosing high-risk investment products, including high-risk mutual funds and hedge funds.