Maybe you’ve heard the phrase “risk on, risk off” to describe the stock market’s ups and downs. The theory goes that when investors are feeling good and confident about things, they start to dip into riskier assets such as small technology and healthcare companies in the beginning phases of what could be a big idea. When investors are feeling nervous, they bail out of stocks and hunker down in defensive options like highly rated corporate bonds.
We can quibble over whether right now is “risk on” or “risk off.” On the plus side, the markets are up strongly year-to-date; on the negative side, earnings are as bad as some pundits feared going into this current round of quarterly reports. There are a lot of arguments right now as to which side of the risk equation you should be on.
However, it’s important to note that there are some super-risky plays that some investors are dabbling in to generate big gains in any market. These sometimes can wind up being big money losers and admittedly take a bit more sophistication and practice to figure out — but if you’re willing to play, you could unlock outsized returns that a conventional long-term investment portfolio can’t match.
If you want to take the tiger by the tail, here are five risky games that investors are playing, as well as how to get started if you want to play, too: