It seems counter-intuitive, but negative interest rates are now a reality in several countries across the world. Institutions and high-worth individuals with money in savings accounts are actually seeing the value of their assets fall. This unprecedented situation raises important questions about high risk investment strategies. If you’re losing money by leaving it in the bank, is it time to consider other investment opportunities where you can get a better return on your assets?
Before answering that question, it’s important to state that negative interest rates aren’t necessarily a bad thing. Having a significant cash balance in the bank still provides security and certainty, but unless you specifically require short term liquidity, it may not be the best long term investment policy.
Faced with negative interest rates, many investors are now seriously re-evaluating their strategies. Do they look at risky investments with high returns, or choose safe and steady options with lower rewards? A mixture of both, perhaps? Or how about investing in venture capital, emerging foreign markets, binary options, or cryptocurrencies?
With a high-risk investment, you could make a fortune… or you could lose everything. Does that mean you should set your sights lower and settle for a smaller but safer return? Read on to learn more about your options, and how to stay safe in the choppy waters of financial investment!
WHAT ARE YOUR OPTIONS?
Before you make any decisions on your investment strategy, you should be aware of all the options. That may sound like an obvious thing to say, but many people are unaware of all the different types of financial products available. As an example, a corporate client who leaves money in a savings account for reasons of liquidity may actually find that government bonds deliver higher yields with the same levels of access.
The other important factor at play here is that financial markets never stay still. Granted, the old investment staples of stocks and bonds continue to be popular, but new markets and opportunities are springing up all the time. A few short years ago, very few people invested in cryptocurrencies, but now they’re the latest thing.
So look at all the options: from traditional staples like forex, stocks, bonds, mutual funds and index funds, to more exciting options like venture cap, emerging markets, binary options and cryptocurrencies. It all depends on what sort of investor you are: someone who likes the thrill of a high-risk investment, or someone who prefers a safer, more conservative approach.
Regardless of which type of investor you are, there’s one piece of advice that holds true across the board: only ever invest your money with a registered company. An unregulated broker might promise you the moon and stars, but the world is full of people who have lost all their money after investing with a fraudulent company. You have been warned!
THE BENEFITS OF CONSULTING WITH A PROFESSIONAL
The benefits of choosing a registered financial professional far outweigh the risks of working with an unregulated broker. First, you can be sure that you’re working with an experienced, qualified expert: you can avail of their specialist knowledge for advice on your portfolio, taxation and investment options. Next, you have the security and peace of mind that come from working with a company that conforms to industry regulations. And finally, if anything does go wrong, you at least have some form of a comeback with the regulator.
Everywhere you look, there are hard-luck stories of people who lost everything by working with unregulated brokers and traders. Don’t fall for the hype, and don’t be taken in by the promise of unreal returns: stay safe by choosing a registered professional!
RISK AND RETURN: YOUR CHOICE
For investors who like to stay safe and play the long-term game, the solutions are clear: savings accounts, government bonds, securities and the like are lower yield, but they offer high security. If you’re prepared to take a risk with your money, however, you could win big. The riskiest investments might see you lose everything… but equally, they could end up making you very rich indeed!
Here are the pros and cons of some of the more exciting forms of investment, with a high-level assessment of the risks and potential returns involved:
Pros: Chance to be in at the beginning, enjoyable to see your investment grow
Cons: Longer-term investment, most start-ups fail
Potential Returns: Medium to High
Emerging Foreign Markets
Pros: First-mover advantage, huge opportunities
Cons: Exchange rate fluctuations, political instability
Potential Returns: Medium to High
Binary Options Trading
Pros: Quick and easy trading, not dependent on what’s happening in the markets
Cons: Rigged options, prevalence of scammers
Potential Returns: High
Pros: Growing market, quick liquidity
Cons: Volatility, prevalence of scammers
Potential Returns: High
WHAT TO DO IF YOU’VE BEEN SCAMMED
With new forms of high risk, high return trading, the chances of being scammed are always greater. Investors are attracted by the chance of making a fortune, and crooks are attracted by the opportunity to scam investors who may not know enough about the market.
The first port of call if you think you’ve been ripped off is to contact your broker and ask for recompense. If that doesn’t work, then complain to your national financial regulator. Of course, if you’ve been working with an unregulated company, or with a broker overseas, you may find that you have no obvious method of redress.
People who’ve been scammed or ripped off with cryptocurrency or binary options often believe that their money is gone for good, especially if their broker was unregulated or overseas. If that sounds like you, you should definitely explore your options with a dedicated funds recovery expert like PayBack. Such companies employ experienced legal and financial professionals, and their expertise can get you your money back where other approaches have failed. It’s well worth speaking to them if you’ve been scammed in any sort of financial trading: you have nothing to lose, and everything to gain.