Being an investor nowadays is significantly trickier than at any time in the past 50 years. Most markets are struggling with an ongoing economic crisis that has no end in sight. However, if you have a bit of capital to spend, it is best to invest it rather than just sit on it waiting for better times. Moreover, you can opt for high-risk investments, which could provide you with substantial ROI sooner or later.
You may even use a payment processing platform to invest your capital wisely wherever possible. For example, you can make instant transfers anywhere in the world with the right payment application like Paxum. This way, you have the guarantee that your money stays safe at all times.
In this article, we look closer at the top high-risk investments you can currently consider despite the economic crisis.
- Initial Public Offerings
Before launching, many companies use an initial public offering (IPO) to sell their stocks to institutional or retail investors. Other brands launch an IPO whenever they have to build capital for further developers. Generally, these share-selling events are underwritten by banks or financial institutions, thus backing their legitimacy.
You can look for IPOs that financial advisors and brokers often push to their clients. Analyze the companies and discover if they have the potential to use the incoming funds to grow their value. This way, your stocks with said companies will also increase, and you can later sell them for profit.
The main risk of initial public offerings is that such an event may fail to generate substantial capital. In this case, the company cannot develop fast enough for the stocks to also grow. So, you may be stuck with low-value shares in a company decreasing in prestige and industry power.
- Venture Capital
You can always consider investing in promising startups if you don’t trust a company offering IPOs. New companies surface on the market daily, often promoting innovative products and solid business plans. All you need to do is find the one you believe will develop quickly and thrive for a long time.
The problem with many startups is they have limited funds and, therefore, underdeveloped departments. Some new businesses invest everything they have in a product or service they wish to take to the market’s apex. Meanwhile, others only have the concept of a product. Therefore, they invested most of their capital in marketing or staff recruiting.
As a venture capitalist, you must provide the funds missing in one or more departments of a startup. Sometimes, you may find that your capital is insufficient to get the wheels rolling. So, it would help if you waited for other investors to board the ship or recruit them yourself. Either way, you may have to lock your funds in an underperforming startup with decreasing chances of success.
- Foreign Emerging Markets
Another top high-risk investment is funding an emerging market in a foreign country. The current economic crisis has expanded worldwide. Still, a handful of countries are registering stable economic growth.
You can research potentially successful enterprises in growing economies and invest there. This process takes plenty of due diligence, expertise, and risk. However, it may pay back handsomely in the long run.