Investments are one of the many ways by which you can obtain financial security. People love to accomplish their investment goals by finding the best investment options, that provide the most significant returns. This is one of the motives why investors can quickly multiply their investment plans as they have an appetite for taking risks.
The risk and return in investments are directly proportional to one another. This means that the higher the chances, the maximum will be the returns.
Therefore, before risking your hard-earned money on any investment, it is essential to assess the risk-reward ratio and then move forward.
Best Investment Options That Provide Higher Returns
#1 Peer Lending
This is a process by which you lend your money to other people or even businesses.
Later on, they’ll pay you back along with interest. The interest rate is almost 2 – 3 times higher than what a bank typically charges. Therefore, the risk – returns ratio can be between medium to high.
#2 Company Shares (Or Stocks)
Buying shares of a company also grants you ownership of the company as well. If the value of the stocks goes up, then investors can profit in terms of capital gains. Companies also provide dividends to its shareholders, which you can use to invest in Glen Innes houses for sale.
Though some companies like Facebook do not pay dividends because of their high-growth share prospects. You can easily invest in companies that are doing well in the stock market. The risk-return ratio is high in this case.
Funds are one of the most easily accessible investments that you can find. You can invest in shares, bonds or even bank deposits as well.
There are two types of funds – active funds and passive funds. There are many options to choose from for any curious investor out there. The risk-return ratio can be high, depending on the type of fund.
#4 Kiwi Saver
Kiwisaver is a retirement scheme in New Zealand, which are made due to contributions from your wage or salary. Then the input will be invested into a fund of your choice, which will be locked for use until you’re 65 years of age.
Both the New Zealand Government and also your employer will be making contributions to the plan as well. Risk – return ratio can be high depending upon the type of fund.
#5 Initial Public Offering (IPO) Or Equity Crowdfunding
The process is similar to buy shares of a company. During crowdfunding, the company plans to sell its shares to the public to raise money to grow.
The difference between buying ordinary shares and IPO is that, since the IPO shares will not be listed on the share market, you cannot sell them anytime. Furthermore, it will also give you the option to invest in fresh start-ups. The risk-return ratio is usually very high in this case.
Investing in property or real estate is not only a favorite thing in New Zealand but all over the world as well. It’s also a part of the ‘Kiwi Dream’ to invest in new homes for sale in Auckland.
Property is tangible; therefore, you can easily touch and see. Investors mostly obtain capital gains from the increasing value of the property and also any rental income. The risk-return is indeed high.
Cryptocurrency is a new kid on the block. There are various digital currencies like Litecoin and Bitcoin that you can invest in. Without the need for banks or governments, cryptocurrencies use blockchain to help make transactions possible around the world, anonymously.
It is known for its meteoric rise and falls, as it went from just $900 to $20,000, in the year 2017. Risk – return ratio is very high in this case.
#8 High Yield Bonds
High yield bonds, either issued by a high-debt company or a foreign government, can offer you extreme returns in exchange for the likely loss of the principal amount. The yield can be between 15 – 20 percent. These bonds are very attractive compared to low-cost bonds.
Also, these bonds are very lucrative because the failure rate is low. The risk-return ratio is high.
#9 Options Investing
Options are high-reward investments, where investors try to time the stock market. Investors purchasing options will buy stocks at a specified price, at a future date, if the cost of the stock turns out to be desirable.
If it’s not, the investor doesn’t have to buy the stock. Since it places time requirements on investments, it can be risky, but the risk-reward ratio is high.
#10 Real Estate Investment Trusts
REITs will provide you with high amounts of dividends in return for tax breaks from the government. The trust takes your money and invests in pools of residential and commercial real estates. As the real estate market is prone to swings in overall value and development, you’d either experience depression or flourishment.
The high fluctuating nature can make the investments to be risky. Still, dividend returns between 10 – 15 percent make the risk-return ratio to be medium to high.
Are you investing in any of these options?
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