There are some high-risk investments which provide better returns compared to regular 8-10 per cent returns. But investment in such instruments involves high risk as the returns are not guaranteed. If you are an individual with low-risk appetite, it is better to avoid these instruments.
Here are some investments which can provide high returns. Investors who are looking for higher returns and ready bear some risk can consider the following.
1) Foreign Markets
As per RBI regulation, one can invest up to $200,000 which will be around Rs 1.2 crore abroad in a financial year. There are many brokers which help you to trade in foreign stocks. The biggest challenge here is exchange rate risk.
2) Currency Markets
One can consider trading in forex market through currency trading. One can make money in falling rupee by trading in the forex market. However, to do this one needs to be an expert or need the guidance on the same.
3) Futures and Options
One can make money even in the bear market. In a futures contract, individuals agree to buy or sell shares at a certain price on a future date. Here the loss will be restricted to the premium paid.
There are a huge number of commodities one can consider trading such as metals which includes aluminum, copper, nickel, precious metals such as gold, silver. To trade in commodities one should have a separate Demat account. This is another risky investment which can provide high returns if invested with proper knowledge and guidance.
5) Corporate FDs
An individual investor can consider investing in corporate fixed deposits which provide high-interest rates. Such corporate deposits offer no guarantee even on the principle invested. The interest rate on corporate Fd will depend on the rating on the deposit. Usually, the returns will be higher if the ratings are not good.
6) Investments in sector mutual funds
Investments in sector mutual funds such as pharma mutual funds or FMCG mutual funds carry a high amount of risk but can provide high returns if held for more than medium term.