All investments come with some form of risk. Certain investments, however, are known to be highly risky ventures that only experienced pros or daredevils undertake. An investor’s ability to take on risk depends on his or her circumstances. For example, if you are the breadwinner of a family with children, you might want to take the safe route; on the other hand, if you are still single, then you can take on more risk than a parent earning an average income. If you belong to the relatively young and unmoored category, here are some high-risk but potentially rewarding investment options to consider:
Cryto is the latest investment craze. It might sound like something you really need to be on top of, unless you listen to veteran investors like Warren Buffet, Bill Gates, and Jamie Dimon. While cryptocurrencies have attracted manic followers, no one can really explain what they are all about. Dimon once infamously called it a “fraud,” but later softened his stance. Most cryptocurrencies have highly volatile price values. Bitcoin, for example, is notorious for wild price swings, sometimes even within a single day. Despite these problems, even skeptics have acknowledged that the technology behind crypto is no scam. That means buying Bitcoins today could make you genuinely rich someday. The catch is that you will also be taking on a lot of risk with crypto. It’s not wise to invest money you need in this particular asset, but if you don’t have dependents and have some cash you can spare for a crypto investment, then it’s worthwhile taking on the risk.
Penny Stock Trading
Investors have varying opinions about how to day trade – the art of buying and selling the lowest cost stocks listed in the pink sheets. These types of stock are mostly considered to be worthless. Penny stocks are known to be highly vulnerable to fraud as well. Trading cheap stocks is one of the riskiest forms of investing a person can undertake, but it can also be potentially rewarding. Despite popular belief, not all penny stocks are wholly worthless. Sirius XM, a well-known entertainment brand today, was once a penny stock. Major companies like Fannie Mae and Freddie Mac have been listed under penny stock since the recession. As you can see, the pink sheets are not completely without value. Savvy investors know how to do their research and pick out the worthwhile penny stocks from the scams. In any case, you should only deal with penny stocks if you are financially secure enough to handle a potential major loss.
Betting It All on a New Technology
Being an angel investor, of sorts, can be highly rewarding. If you had invested at least $1,000 in a company like Google or Facebook in the early 2000s, you would be a millionaire today. Investing in new tech is promising but it is also highly risky. The tech sector is incredibly competitive. That means you never know when a tech company could lose out to the competition. Consider, for example, the fate of Blackberry. The company was once thought to be a contender to dominate the mobile market. Now the company’s stocks are barely avoiding the pink sheets. Tech can fast become outdated. Therefore, new investors should be willing to weigh enormous gains against equally stunning losses.
If you are young and relatively debt-free, you can invest in the above sectors and try to mitigate the risk. With mobile technology allowing quick investing practices, many entrepreneurs are setting their sites on these fast-growing industries. It’s important to understand the scope of risk involved before you spend your money, however.
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