High-yield investments and how to reduce investments risk
Not so long ago in order to make a lot of money from investments you needed to have a large starting capital.
Today, due to the fast Internet development the high-yield investment is available to anyone. And it does not require a lot of money; you can start even with a hundred dollars.
The high-yield investment means putting up money in order to receive income several times higher than interests on bank deposits. Therethrough, the income must be significantly larger than other available ways in the market.
Kinds of high-yield investment
Let us consider the main types of high-yield investment, chosen by the majority of investors today:
- investments in PAMM accounts;
- investments in HYIPs;
- fiduciary management;
- investments in start-ups.
What is better: a bank or high-yield investment?
It is a quite complicated issue, both have their advantages and disadvantages. The undeniable advantage of bank deposits is their really high level of reliability. Investing our money in the bank, we may be pretty sure of its safety.
At the same time, the level of income provided by such deposits leaves much to be desired. As a rule, interest rates are a little more than 10% per year. On the other hands, although the high-yield investment always entails risk, it overlaps these numbers several times. For example, more or less stable internet project provides about 100% of income and there is more to come. But such a level of income involves certain risks. Even stable high-yield project with good reviews and history can not guarantee the safety of your capital.
How to reduce the risk of investing in the Internet?
The main way to minimize the risk in the Internet is to diversify investments. Firstly, we need to invest in various Internet projects in accordance with their riskiness, distributing shares in proportion to the level of perceived risk. Secondly, we need to diversify our investment in one project by choosing different high-yielding instruments.
Thus, even if one of our projects goes out of business and we lose invested money, other will cover it and profitableness of our investments will remain positive. Here we should remember one important rule: "Money likes diversification". Diversification of risk is the most important thing if you want to become a successful investor.
Is it worth it to put money in high-yield investments?
In order to answer this question it is necessary to make some calculations. Surely, we are going to compare them with bank deposits. In a bank we will have not more than 10%, though it is possible to reinvest and obtain an income level of 15-20% per year.
On the other hand, almost any high-yield project gives us far more. Thus, if you invest in high-yield projects in the Internet, you can get 10 times more. On the other end of the spectrum, the risk of loss of money is also increasing exponentially, therefore the best option would be to combine various ways of investing money.
In the case of proper distribution of money in different companies, we will lose everything only if half of our projects do not fully recover the money. It becomes clear that it is very unlikely.
Which way of high-yield investment is to choose?
It is fair to say that the more investment patterns you have, the better it is for you. One of the most promising directions is to invest in a PAMM account. On the one hand this kind of investment in the Internet is high-yield one today, on the other hand the level of risk is not very high. In fact, such directions can be considered as the high-yield investment of high reliability with great income potential.
Moreover, knowing only this way of investment, we can diversify the risks pretty well. How is it?
Firstly and foremost, there are more and more Forex brokers offering similar services, so we diversify investments between various companies. Secondly, we do not have to constantly look for new projects, such as HYIPs that appear on occasion and exist only a few months.
Thirdly, we can create different investment portfolios depending on the risk that we are ready to accept and the profitableness that we want to receive from our online investment project.
Certainly, investment in HYIPs is also worthwhile, but in order to reduce risks and maximize the income you should follow a few rules:
- do not invest all your money into one project no matter how good it may seem;
- constantly withdraw profit as quickly as possible trying to recover your investments;
- join the project as close to the launch as possible and choose rapidly developing and promising companies;
- keep most of your savings in the bank account.
In this review we have learned about the high-yield investment in the Internet, so now we realize that money can and should be invested, especially if we want to receive the stable passive income.
On websites of all the companies, that provide investments and other kinds of putting up money there is such information as ‘Investment of money is a risk, invest only the amount of money, that you are not afraid to lose’.
As I have said, the HYIP seasonality plays a very important role. Now new investments are to be done carefully because only two months left before the New Year. Ideally you should look for projects in which a period of the transferring of positions to no-loss is about a month in order to have time to make profit before the end of the year. Or you can invest in stable projects that deserve the confidence of investors.
According to Wikipedia PAMM abbreviation means percent allocation management module. From the perspective of a trader the PAMM account is no different from an ordinary trading account. In this account an average trader (but he is called as the manager of the PAMM account) operates with the same trading terms and receives the same income.