Investing In A Mutual Fund..? | Personal Finance Reference
If it was that easy, banks would invest in things like that instead of making 5% home loans.
Whenever the yield is high, the risk is high and you could lose all or part of your investment as well as any dividend or interest payments.
High yield junk bonds pay 10% or more but the chance of those companies defaulting on the bonds are high. High growth equities could pay that over the years but you will quickly lose most of your investment if the market turns down..
Hedge funds (usually requires at least $250,000 minimum) generally pays higher than many other funds or equities but they charge 2% per year of your investment, 20%-50% of your profits, and usually you can only redeem part or all of your investment once a year. However, when the market turns, you can also lose most or all of your investment when investing in hedge funds.
Even if you were to invest in 10 year treasuries to get a 3% return, that can be risky since interest rates could rise and if you want to sell the treasury before maturity, investors won’t offer you face value for your treasury (the market value of a treasury drops as interest rates rise and that could be 50% or more depending on the current interest rate).











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