The most frequent question asked is, what is the best investment in the Philippines? But for investors with diverse profiles, a common question is what are the high-risk investments in the Philippines? So today, we will be exploring this subject by going over six of the most high-risk investments in the Philippines.
High Risk Investments In The Philippines
1. Nonfungible Tokens
Nonfungible tokens have taken the Philippines by storm. Nonfungible tokens have become more popular in the Philippines than just about any other country on earth, and with good reason. That reason is profitability. Whether you are for or against nonfungible tokens, there is no denying that many Filipinos have earned money from NFTs
Recently we spoke about how you can earn nonfungible tokens by playing NFT games in the Philippines. But there are also opportunities to purchase NFTs on the several marketplaces available for investors. The aims of purchasing NFTs are to later sell for a profit, where the high risk comes into play.
This industry is fairly new, so NFTs are considered a high-risk investment in the Philippines. Expert investors often advise you to only invest in industries you are familiar with. Thus if you are not too familiar with nonfungible tokens, let’s turn our attention to other high-risk investment options in the Philippines.
2. Altcoins & ICO Coins
For those new to the cryptocurrency world, altcoins mean alternative coins. Altcoins are cryptocurrencies after the original cryptocurrency – Bitcoin. ICO means initial coin offering (sometimes initial currency offering). This is when a cryptocurrency is in the startup stages, and the developers aim to raise capital; this is similar to IPO in stocks.
These options are incredibly high-risk investments in the Philippines but can also bring in a high level of profitability in a short amount of time. Those looking to double their money in six months in the Philippines choose a high-risk investment such as cryptocurrency. But in some cases, you can find yourself doubling your money in as little as an hour!
This is due to the high volatility of the market. Due to this volatility, many scammers have taken advantage of eager investors by creating cryptocurrency scams (rug pulls). Therefore even though cryptocurrency offers an excellent investment in the Philippines, it is also one of the most high-risk investments.
3. High Risk Mutual Funds
There are several different types of mutual funds in the Philippines. The great advantage of investing in mutual funds in the Philippines is that funds come with a fund factsheet. This is a vital piece of data that can aid investors in making a more informed decision when investing in high-risk investments in the Philippines.
Some mutual funds are low-risk. Typically these are invested in blue-chip stocks or low-risk assets. However, we have high-risk mutual funds in the Philippines at the other end of the scale. High-risk mutual funds are comprised of high-risk investments such as investing in volatile stock, new assets, etc.
As an example, one of my investments is in a high-risk mutual fund. The mutual fund invests in several small businesses across several industries in the Philippines. Due to many factors, including the lack of historical data, this is a high-risk investment. However, as an investor, I feel the opportunities outweigh the risks. But we all have our own set of risk tolerances.
4. IPO Stocks
IPO Stands for initial public offering and is most common in the Philippine Stock Exchange market. An initial public offering is when a private company (not listed on the PSEi) turns into a public company (is listed on the PSEi). At this time, investors will be able to purchase shares of the company, but this can be a high-risk investment in the Philippines.
One of the main disadvantages of an IPO for Filipino investors is that nobody knows how the public will react. For example, the IPO could be set for 10 Pesos per stock. After a few days, the price can be 2 Pesos per stock. On the other end of the scale, the stock can be 2 Pesos on day one, but the next they could be 10 Pesos.
Naturally, this is an example only, but it does illustrate that the markets can respond positively and negatively to an IPO, which is why initial public offerings are high-risk investments in the Philippines. However, our full list of high-risk investments in the Philippines is not complete yet; we will dive into private forms of investing.
5. Seed funding
So what exactly is seed funding, and why is this a high-risk investment in the Philippines? Seed funding is investing in a small company in the very early stages. Most of the time, this is at the startup stage. Due to the uncertain future, seed funding is a high risk but high reward investment in the Philippines.
If you are looking for less of a high-risk investment, one option would be Angel investing. This is a high-risk investment, but it is slightly less high risky than seed funding. With Angel investing, businesses often have a solid foundation and wish to grow to the next level. Thus there is more information and data to process, resulting in a more informed decision by investors.
From time to time, we often get asked questions such as what are the rewards of seed funding or investing in a private company? Of course, this will depend on the agreement made between the investor and the entrepreneur. But in most cases, stock (ownership) is given.
An increasingly popular high-risk investment in the Philippines is crowdfunding. Similar to other high-risk investments on our list today, there are several types of crowdfunding, some of which are more high risk than others.
For example, real estate crowdfunding has become a common topic discussed online. However, depending on the property, location, markets, and demand, this crowdfunding type can be very high risk or very low risk. The high-risk level will depend on what type of crowdfunding project you are investing in. Still, most of the time, these are high-risk investments.
Most crowdfunding entrepreneurs often do not have much data, research, history, sales, statistics, etc. So naturally, this can lead to less-informed investors’ decisions. But naturally, this will differ from case to case. But from research into the latest crowdfunding projects in the Philippines, most would be rated as high-risk investments.
Should I Invest In High-Risk Investments In The Philippines
It’s commonly stated that investors should only invest money they can afford to lose. Unfortunately, with high-risk investments in the Philippines, the likelihood of investors losing money is high. But at the same time, rewards are often much better than typical investments in the Philippines. Thus investors must weigh the advantages and disadvantages of an investment on an individual level.
When deciding if you should invest in high-risk stocks in the Philippines, high-risk mutual funds, etc., you need to ask yourself why you want to invest in high-risk investments?
If you are looking to invest in high-risk investments as cash is tight and you are struggling financially, then high-risk investments are not suitable. Naturally, emotions of your current situation may cause you to make inappropriate investment decisions resulting in a loss of funds.
However, if you are financially independent and looking for high-risk investments in the Philippines, this may be more suitable. This is because high-risk investments can balance themselves out in time (on some occasions), and therefore it is more likely you can weigh out the highs and the lows of the market.
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