Low-Risk and High-Return Investment
We all have dreams and goals, and each of us has our own way of achieving them. To reach those goals, it’s important to face our fears and take smart risks.
As Warren Buffett says, “Risk comes from not knowing what you’re doing.” When you understand an opportunity, it can lead to great results.
Let’s explore this further!
What is Risk?
Risk in investing means the chance of losing money or not earning as much as you expect. The higher the risk, the greater the potential to either lose money or make a big gain. Risk is typically divided into three types: low, medium, and high risk.
To put it simply:
1. Low risk means it’s safer, but you get smaller returns.
2. Medium risk means there’s a balance between growth and risk.
3. High risk means you could make big profits, but you also risk losing more.
But are there any low-risk and high-return investment? Let’s first understand the types of risk.
Low-Risk Investments
These are stable and easy to predict, but they usually don’t offer huge returns. Examples: Government bonds, savings accounts.
Medium-Risk Investments
These have a balance of risk and potential returns. They can fluctuate more than low-risk investments, but they are still relatively safe. Examples: Dividend-paying stocks, index funds, ETFs.
High-Risk Investments
These are more unpredictable and can have big ups and downs, but they offer the chance for higher returns. Examples: Cryptocurrencies, options, and futures trading.
Before delving into low-risk and high-return investment options, let’s first understand what returns are.
What Are Returns?
Returns refer to how much money you make (or lose) from an investment compared to how much you invested. It shows how well your investment is performing.
For example, if you invest ₹12,000 and after a year it grows to ₹14,000, your return is ₹2,000, or a 16.67% return. Bigger returns mean more profit, while negative returns mean you lose money.
Why Do People Like Low-Risk and High-Return Investment?
According to prospect theory, people feel the pain of losing money stronger than the happiness of making money. Because of this, they try to avoid risks that could cause losses but are willing to take more risks to avoid the stress of losing money. That’s why they look for low-risk and high-return investment whenever they can.
An investment from GHL can offer better returns compared to traditional investments, with lower risk. Traditional investments, like fixed deposits (6%), commercial real estate (8%), gold and bonds (10%), and mutual funds (13%), provide average returns. But GHL offers returns ranging from 18% to 24%!
You can wisely invest in secured non-convertible debentures from GHL India Asset, a company that buys and sells distressed properties with the help of skilled lawyers and realtors.
