4 High Risk Investments That Could Pay off Big in 2020

Do you regularly invest in stocks? If so, you know you are trading risk for the possibility of rewards. While this is true, there are some stocks that have higher risks – and the possibility of higher rewards – than others.

If you are interested in high risk investments, you probably want to make the safest, high risk investments possible. Keep reading to learn more about some of the best options to consider in 2020.

  1. TEVA – Teva Pharmaceutical

This company isn’t having that great of a year. It’s down over 44 percent and still falling.

The issue is that Teva has limited growth and significant debt. It’s primary drug, Copaxone, used for treating multiple sclerosis, is facing competition from generic versions of the same medicine, such as Mylan.

Bankruptcy for Teva isn’t a near-term scenario; however, the trajectory the company is on now shows it may occur in the future. Put simply, TEVA is the classic case of “buy when there’s blood in the streets.” There are several reasons that TEVA is considered one of the great, yet risky, stocks to consider buying in 2020.

Even though there’s been pressure on generic drugs, it isn’t going to last forever. The company has already begun to sell assets to clean up its balance sheet. This has helped de-risk the story a bit.

While it’s a risky path, if TEVA is able to gain 20% (or more) by reaching a higher multiple, it can remove the possibility of bankruptcy – and result in potentially significant gains.

  1. Trulieve Cannabis

There’s no question that investing in the cannabis industry is a risk. After all it’s illegal at the federal level in the United States. However, if you are an aggressive investor, you may want to consider looking at Trulieve Cannabis for a few reasons.

This company is considered a rarity among cannabis stocks because it’s already profitable. In the second quarter, Trulieve reported record-high earnings and revenue.

Also, the company is focused on Florida’s medical cannabis market. The state offers a great opportunity for those in the medical cannabis industry because many people are moving to the state when they retire. Also, at this point in their life, individuals are much more likely to suffer from conditions that require cannabis use.

Even more, it’s predicted that the state of Florida may legalize the use of recreational cannabis, with there being an amendment set to appear on the 2020 ballot for this purpose. Trulieve is supporting these efforts, which means the industries present in the state poses the possibility of significant growth and returns.

Even if the efforts above aren’t successful, there’s plenty of room for this company to grow in this market. You may even want to consider shorting a stock for this purpose. While it’s risky, the possibility of significant returns is huge – especially if the Florida amendment is successful.

  1. SFL – Ship Finance International

When it comes to investor capital, the shipping space has long been considered a “Bermuda Triangle.” However, with Ship Finance International they may be the exception to this rule.

There is probably going to be some near-term volatility and the dividend for Ship finance may be at risk, it’s still a good stock to consider if you are in a position to handle the risk.

When it comes to the shipping industry, this is still considered one of the best potential moves to make. The industry, along with a leveraged balance sheet, both demonstrate this risk, along with the potential rewards.

If Ship Finance can make it through the tumultuous waters it faces in the next few months, there’s the possibility of a significant return for shareholders.

  1. Baozun

According to some metrics, Baozun doesn’t really look as high risk as far as growth stocks go. The company is trading at approximately 30 times the year’s expected earnings, and it’s managed to grow an adjusted net income of 65 percent and 46 percent in the first and second quarters of the year.

It’s not as if things are going bad for this Chinese e-commerce service provider on the revenue side. Sales have been up throughout the year.

Baozun also has an above-average risk profile when it comes to creating a list of stocks that are worth building a portfolio around. That’s not because the business doesn’t have longevity, however, there are several factors that go into a company’s stock price and performance.

Even though the company has posted profits and sales in the second quarter that came in ahead of the expectations for the market, the stock for Baozun fell double digits after the second-quarter earnings results. Also, the ongoing trade war between the U.S. and China has resulted in another turn for the worse.

While the trade situation has put Baozun as a risky short-term play right now, the underlying business is still sound. As a result, it makes a smart move for long-term investment purposes.

The Best High Risk Investments to Make

When it comes to smart, high risk investments, there are more than a few opportunities to consider. The list here gives you an idea of what stocks to look at going in 2020 that provides the biggest opportunity for a return.

When it comes to money, investing, and protecting your wealth, we have you covered. Be sure to check out our blog often to see what other types of helpful information and insight about your financial situation can be found.

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