When an investment vehicle offers a high rate of return in a short period of time, investors know this means the investment is risky.
Given enough time, many investments have the potential to double the initial principal amount, but many investors are instead attracted to the lure of high yields in short periods of time despite the possibility of unattractive losses. Here are more high-risk investments that could double your money.
See Also: Risks in Stock Investment
Foreign Emerging Markets
A country experiencing an industrial revolution or a new political regime that encourages development can be an ideal investment opportunity. Spurts in economic growth in countries are rare events that, though risky, can provide investors a slew of brand new companies to invest in to bolster personal portfolios.
The greatest risk of emerging markets is that the period of extreme growth may last for a shorter amount of time than investors estimate, leading to discouraging performance.
See Also: How to Overcome Volatile Markets
Real estate investment trusts (REITs) offer investors high dividends in exchange for tax breaks from the government. The trusts invest in pools of commercial or residential real estate.
Due to the fundamental interest in real estate ventures, REITs are prone to swings based on developments in an overall economy, levels of interest rates and the current state of the real estate market, which is known to flourish or experience depression. The highly fluctuating nature of the real estate market causes REITs to be risky investments.
High Yield Bonds
Whether issued by a foreign government or high-debt company, high-yield bonds can offer investors outrageous returns in exchange for the potential loss of principal. These instruments can be particularly attractive when compared to the current bonds offered by a government in a low-interest rate environment.
See Also: Correct Your Understanding about Bonds
Currency trading and investing may be best left to the professionals, as quick-paced changes in exchange rates offer a high-risk environment to sentimental traders and investors. Those investors who can handle the added pressure of currency trading should seek out the patterns of specific currencies before investing to curtail added risks.
See Also: Learn the Best Currency Pair to Trade
In case you have missed the first part, you can read it here.
See Also: Warning Signs of a Risky Investment
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