Why High Risk Investments are Attractive to Investors

Complex, high-risk investments like global funds to many investors as they come off as investment opportunities, or vehicles, offering rather high returns according to Terraza and Razafitombo (2013) and Vancas (2010). The investments include global funds along with ETDs (Exchange-Traded Derivatives). The investments carrying low risks are seen as only capable of eking out appallingly low returns according to Vancas (2010). High-risk investments pass appreciable percentages of own incomes to those investing in them. For instance, MLPs (Master Limited Partnerships), which are corporate structures traded publicly especially in the energy industry, pass on to investors the greater parts of own income according to Manuel (2015).

That means that MLPs are attractive to investors owing to the actuality that they commonly afford them high dividend yields. As regards limited corporations, the yields are high since they cannot be taxed, offering investors marked tax savings (Terraza & Razafitombo, 2013). High-return bond funds are rather attractive to investors regardless of the attendant appreciable risks. They hold a promise for rather high returns, or dividend yields, since they specialize in either corporate or municipal debt. The funds can be accessed as ETFs (Exchange-Traded Funds), mutual funds, or even CEFs (Closed-End Funds). REITs (Real Estate Investment Trusts) are associated with substantial risk (Manuel, 2015). Even then, REITs are rather attractive since they are obligated to, as a minimum, distribute nine tenths of own taxable incomes to those investing in them, unit holders.

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