High-Risk Investments You Need to Avoid

High-Risk Investments You Need to Avoid

If you have a pot of money put to one side, then the time may come when you want to do something with it. You may want to make an investment or even try and find a way to increase your capital without taking too much risk. A lot of people find themselves in this situation, but if you want to make the most out of the money that you have then you need to try and avoid these high-risk investments.

Structured Products

A structured product is an investment but your return will depend on a certain set of rules. Investments like this can include guaranteed capital plans, protected funds and more. Some structured products will give you an income and others will increase the value of your investment. The way that your return will be calculated will make it incredibly difficult for you to find out how your investment is going to perform. If you do want to invest in structured products then you have to make sure that you understand the risks. If you don’t then you need to seek financial advice, or even avoid them altogether. If you want to invest but you know that structured products are not for you then you may want to look into Forex. If this is the case then check out this review on HotForex.

VCT

A VCT stands for a Venture Capital Trust. These are companies that invest in new and upcoming companies that are not yet recognised or sold on the stock exchange. This does come with its own tax advantages. A fund manager will pick up the companies that they think have potential, but this is risky. The fund manager may fail completely, and you may get way less back than what you’d like. On top of this, your money is going to be tied up for around 5 years. This is usually too long for a lot of people, so think about consulting a professional or really take the time to understand what you are getting into before you dive in.

Spread Betting

Spread betting is much more like betting when compared to making an investment. You essentially bet whether a share is going to go up or down. The more the share changes, the more you are likely to win. You usually have to have a minimum amount of money in your bank account and you may also lose substantially more than what you have as well. Spread betting is far riskier than other types of investment so you do have to keep this in mind.

High-Risk Investments You Need to Avoid
High-Risk Investments You Need to Avoid

Land Banking

Land banking is an investment where you buy a bit of land that has not been granted planning permission yet. You hope that the land is going to be given this permission so that the value of it will increase significantly. Schemes tend not to be authorised and the risk that comes with them is substantial, so you really do have to think about this before you get started.

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