High-risk investments are complex and unpredictable. They may offer the chance for a higher return than traditional investments, but they also come with a greater chance of losing money. These types of investments are generally suited for very knowledgeable and experienced investors who understand the risks and are prepared to do their own research.
Some common examples include:
Investing in early-stage companies through online platforms. These ventures may succeed—or fail completely.
Digital currencies and tokens that can change value quickly. They’re not backed by governments or banks
Buying and selling currencies to profit from exchange rate changes. This market moves fast and can be difficult to predict.
Professionally managed funds that use aggressive strategies. These are typically only available to wealthy or accredited investors.
These investments may appeal to people who:
Are comfortable with uncertainty and market swings
Have extra money they can afford to lose
Want to diversify beyond traditional stocks and bonds
Are seeking higher returns and are willing to accept higher risk
High-risk investments require careful consideration. Before you invest, make sure you:
Understand how the investment works
Know who is offering it and whether they and/or the trading platform is registered (very important!)
Read all documents and disclosures
Ask questions and get independent advice if needed