The one good thing for investors is that India can throw-up a plethora of high risk high reward investments, along with the traditional safe investment instruments.
On the other hand, for those who do not have a penchant for risk, you, can also look at opportunities for assured returns like bank deposits, public provident fund and various small saving post office schemes.
1) Currency markets
You can buy and sell foreign currencies, including the US dollar and returns can be high and risky. For example, in the last one month, you would have earned as much as 2.35 per cent by selling the US Dollar.
On Sept 11, the rupee closed at 66.24 against the dollar and it is now 64.78 to the dollar. This would have given a cool return of 2.35 per cent in the last one month.
Forex markets are extremely volatile and give higher returns than most safe instruments. You can lose on a trade as these are high risk instruments. Read how to trade in the forex markets in India
Much of the forex volatility comes when global markets are volatile. In the next few months, China, the US Federal Reserve, could add to substantial volatility for the forex markets.
2) Commodity markets
You can also buy and sell commodities in India. For example, if you had to sell crude oil a year back, you would have gained as much as 40 per cent today. There are various other commodities including gold, silver etc., in which you can trade.
These are mostly high risk high investment trades. Again in commodities, these days metals are more volatile, then gold and silver, which have been almost steady in the last few months.
Read how to trade in crude oil here
3) Equity markets
Equity markets have the highest volatility as compared to the other two mentioned above. These are high risk investments. You can bet on equity either as a trader or as an investors. Most marketmen suggest investing in the market rather then trading. But, there have been cases where traders have also been successful.
4) Foreign Equities
You can buy and sell in foreign equities. There are a number of broking firms in India which offer this option. This is not very different to the risk prevailing in the Indian equity markets. You can open a overseas trading account and can remit up to dollar 200,000 per year. You can then proceed to open an overseas trading account and buy shares. ICICI Direct is one broking firm that offers this facility.
All of the above are high risk investments. Care and precaution must be taken before venturing into any of these high risk high reward investments in India. Unless, you have the knowledge it is advised that you seek expert opinion before venturing into the same.
For those who do not have an appetite for risk, the best thing would be to stay invested in the traditionally safer bank and post office deposits.