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What Are High Risks Investments?

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By Author: Regie Macalam
Total Articles: 64
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Success in investment is achievable through proper management. You can surpass many challenges if you will undergo business strategy consulting. Doing this will awaken your awareness on the risks involved in your investment. Investment risks are positive things if you'll able to endure them. If you know how to work on them, then you are less vulnerable for a profit loss.

All high risk investment scams are capable of high returns. That is what you are ahead of when you defeat them. Luck is not the only weapon that you can use when dealing with this kind of risk, it is much of a hardwork and analysis. But if you fail to face this challenge, you just might find your investment posing a big O. High risk investments include penny stocks, international stocks, Forex trades etc.. When we talk about returns, it is limitless. The only thing that you need to do is to stop being so finicky with what risks are you going to deal with.

Investing in commodities is accompanied by many risks. It is the buying or selling of future or option. Future is a commitment to buy (call) or sell (put), in a set price, on a future date. Option ...
... is more of a right than obligation.

The cost of loss in buying or selling a future is high because of the absence limit as to how high the share price can rise.

On the other hand, options are less risky. You won't have to commit yourself into it. If you are not able to overcome the risk, the highest value that you can lose is the cost of your option. Options got an intrinsic value and a time value. The first value compares the option price with the current share. The second value depends on how long does the option has to run until the final exercise date.

When you invest in options, your investments are protected. If the market is down, instead of selling all your shares, you can sell your options. You can make up for the losses on your shares by selling some of your options.

Buying convertibles is one thing that an investor can do. There are less risks here. People say that the closest thing to a perfect investment are the convertibles. This is because of what it offers to investors, and there are a lot. Convertible is a bond or share that is convertible into shares of mutual funds. When you buy a convertible bond, you will have all the interest and get to participate in any rise that will happen to the company's stock. If the shares increase, you can change the bond into share and earn a certain amount. Or if this did not happen, you can just take the interest and wait for another growth.

Knowing what is risk is a knowledge attained individually. There will be times that the small risk for you, is a high risk for the other. Risk tolerance will determine how far can your business sail in the sea of business dreams. Risks are part of the game, an essential part of the business. As long as you can cope up with every situation, then the future is bright, it's right there waving at you.

FutureAfrica is a consultancy firm that offers business consulting services such as process modeling, organizational transformation, people development and more.

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