High Risk Investments
High risk investments are generally only recommended for experienced investors who fully understand the risks that they are taking and can afford to lose all of their invested funds. In some instances, the losses could be even higher.
> Spread-betting and Contracts for Difference. These are very complex investments. In basic terms, an investor (or their investment manager) will place a bet on a financial market- for example a share. Instead of buying that share, they guess whether the share is likely to increase or decrease in value and they place a bet on this outcome. If the market moves the opposite way, the investor could actually lose more money than they originally bet
> Unregulated Investments. The Financial Conduct Authority (FCA) controls the financial services industry in the UK and prepares rules which are designed to protect consumers and to keep the industry stable. If you make an investment that is not regulated by the FCA, you are likely to lose certain protections and you could be more vulnerable to a scam. Examples of investments that are not regulated by the FCA are listed on their website, and include:
- diamonds / gold / precious metals / graphene
- forestry (UK and international) / overseas agriculture
- land for development / land overseas
- sustainable energy