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What Are High Return Investments?

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What Are High Return Investments?

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Classic investments with high potential returns are company shares. It is the most profitable form of investment. Besides, shareholders receive an annual dividend. The other side of the coin is the high-value fluctuations in the stock market. When a stock suffers a significant loss, it can take a long time for investors to regain their lost money. Equity funds, where you can invest in different companies at the same time, offer a way to diversify your portfolio. Investing in a stock index fund or ETF (Exchange Traded Fund) is also becoming increasingly popular.

Reverse Convertible Bonds:

Reverse convertible bonds are a lucrative alternative to stocks for buyers of fixed-income securities or corporate bonds. A reverse convertible bond is a contract between an issuer (e.g. a bank) and investors, which on the one hand functions like a bond: the investor receives a fixed interest coupon over a limited term, and the issuer gets the capital provided by the investor.


The interest rates on reverse convertibles are higher than on classic corporate bonds because there is a variable type of repayment. The issuer has a choice: either pay back the nominal value of the bond as a monetary amount on maturity or an individual, predetermined number of shares or their equivalent. Reverse convertible bonds are therefore a combination of a high-yield bond and a bearer bond whose value is based on a claim.


Of course, the issuer selects the one that is most favourable for him from the two possible final scenarios. If the price of a share rises, the investor only gets back the amount that he once made available as a bond; If the cost of the claim falls, the issuer delivers the number of shares specified in advance. In this case, the investor’s return is reduced because the current market value of the shares is less than the nominal amount that he once invested in the bond. This means that, in contrast to shares, with a reverse convertible bond, the investor’s chance of winning is capped. That is the price for the interest, which is usually well above market level. In the unlikely event of the company’s insolvency, however, the situation is the same as with a share: investors then have to accept a total loss.

Exotic Investments: Classic Cars


If you like it even more unusual, you can also rely on exotic investments such as classic cars when looking for a good return. The most expensive car in the world is a classic: the Ferrari 250, built-in 1957. In 2011 it changed hands for € 12 million. A constant increase in value is likely – with proper care of the car.

Equity Crowdfunding


With the advent of FinTechs, crowd-investing or crowdfunding is celebrating great success as an alternative investment option for the assets of private investors. In crowd investing, many investors join forces on an internet platform to be able to invest large amounts together. In this way, they reach the thresholds of the high-yielding asset classes that were previously reserved for professional investors – with acceptable risk. Together with new providers of crowd investing, more and more credit platforms (crowdlending) are emerging on which private borrowers and lenders can find each other. As an investor, you can also use the most high-interest loans as a high-yield capital investment. However, significantly high risks are to be expected, as the creditworthiness of the borrower is challenging to assess.

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