Question

What type of investment plan would be beneficial for a scenario that involves a guy who is willing to take some risks? (sky is the limit and creativity is encouraged)

Answer 1

The investment plan that would be most suitable for a person who is willing to take risks would be to invest his money in stocks. He could start out with a small investment which if done right would reap profits and then he can keep investing back its profits, thereby making his investment grow.

Investments in the stock market are subject to 'equity risk', that is the risk of drop in the prices of stocks due to market variations. The higher the risk of a particular investment, the more are the returns. The person should determine his 'risk tolerance' that is he should calculate the total amount of money he is ready to risk. If he likes to take risks, the possibility of earning large profits probably outweighs the fears of losing money.

If one can shoulder more risk and invest their money for a longer time period, they may try investing capital in mutual funds or exchange traded funds (ETFs). These funds are composed of various securities such as bonds, stocks and commodities. Mutual fund corporations collect and manage the money of other people for investment purposes. Since these corporations employ financial experts, lots of college investors opt to put their money in mutual funds or ETFs.