Proven Investment Strategies for Maximizing Returns

Chances are, you may wonder where to put money to gain interest. To achieve the highest possible return on investment, investors should understand that earning large sums of money is not a passive process. This means that if one aims to generate maximum returns for every dollar invested, certain conditions and limitations must be acknowledged:

  • One option is to accept high-risk investments, which come with the constant possibility of losing them all.
  • Alternatively, investors can take a proactive approach by working hard, using their knowledge and experience, and continually learning new things.
  • Lastly, investors should be prepared to exercise patience, as it may take a considerable amount of time to see good returns on their investment.

To make sound investment choices and decide on the best places to put your money, seeking the guidance of financial, investment, and tax advisors is imperative as they possess the expertise to delegate tasks that would otherwise be overwhelming for investors. Taking into account the restrictions in place, let’s examine the most profitable and promising investment options.

1. Business projects in Africa

In layman’s terms, African nations often have a multifaceted reputation. Some perceive these countries as plagued by barren deserts, malnourished children, and persistent armed conflicts, i.e., issues that seem insurmountable. However, Africa is a vast and resource-rich continent with a population of 1.4 billion that has the means to purchase goods and services, opening up new markets and business opportunities. Countries such as Egypt, Morocco, South Africa, Rwanda, Ghana, Botswana, Mauritius, Côte d’Ivoire, Kenya, and Tanzania boast stable political regimes, fast-growing economies, and promising investment prospects. This makes the above nations attractive destinations for business ventures.

Africa’s markets present multiple opportunities across several sectors:

  • Sales of automobiles, auto parts, and servicing, given the shortage of local manufacturers and high demand for personal transportation in cities.
  • Electricity generation from alternative sources, mainly solar panels, and selling the resulting resources.
  • Agriculture and agribusiness, which face challenges due to vast areas of fertile land and local farmers’ lack of resources and tools.
  • Affordable housing construction, in anticipation of Africa to become the main center of population growth by 2050.
  • E-commerce, applications, and online services that cater to the growing digital economy.
  • FinTech products that make online payments easier for local entrepreneurs.
  • Education services, including private secondary schools, that are crucial to bringing up and developing the next generation of African leaders.
  • Tourism and hospitality businesses that leverage Africa’s natural beauty and rich cultural heritage.
  • Rental of specialized equipment, which is critical to various sectors in Africa, such as mining and construction.
  • Logistics and transportation services that help connect African businesses and people with the rest of the world.

This concise list highlights the immense demand for various products and services in African countries. Any entrepreneur can capitalize on the opportunity and achieve a good return on investment. Africa is projected to be home to the majority of new millionaires shortly.

NB: entering new and unfamiliar markets always poses significant risks. You can’t launch a successful business in a new country overnight. It requires time to adapt, study consumer behaviors, and comprehend demand patterns. Nevertheless, if you have a promising business concept, the developing African market with its huge potential might promise greater financial gain than in the struggling European economy.

2. Corporate bonds

Investing in government bonds and bills is considered to be a safe bet, but the returns may vary depending on the country. For those seeking higher interest rates, private and state-owned corporations issue bonds, which tend to have higher rates than government-issued securities.

NB: investing in corporate bonds carries a higher risk, as the investor relies solely on the company’s ability to pay back the debt. If the company goes bankrupt, the investor may lose their investment. That said, diligent research helps investors identify reliable and financially sound companies whose bonds may provide good returns.

Offered to your attention is a small list of profitable corporate bonds that are the best way to earn interest in 2023:

IssuerDeposit termYieldNote
Bonds of Georgian companies3 months to 4 years6% to 9% in USDIt is not possible to open a brokerage account remotely, personal presence is required, and you should be prepared to explain the origin of funds.
Bonds of Armenian companies2 to 4 years6% to 9.5% in USD and 10% to 15% in AMDInvestors are not subject to income tax and dividend tax on coupon income.
Kazakhstani company bonds220 to  10,200 days10% to 30% in KZTThe Kazakhstani market also offers ESG bonds for funding social and environmental projects.
Bonds issued by Brazilian companies1 year to 10 years6% and more in USD and 15% and more in BRLForeign investors are exempt from taxation on transactions with debt securities, including both government and corporate bonds.

High-yield corporate bonds are often called “junk bonds” due to the low credit ratings assigned to the issuing companies by reputable agencies. Such ratings indicate a significant risk of issuer default. However, there have been numerous instances where companies with high investment ratings have gone bankrupt, while lower-rated companies have improved their financial position, resulting in profits for investors above the nominal value.

Say, companies such as Tesla, Ford Motor, and Netflix, which received poor ratings in different years, turned out to be profitable investments. Therefore, when evaluating high-yield corporate bonds, investors should take into account other factors beyond international investment ratings, such as the financial health of the issuer, the current market conditions, and any significant industry developments. NB: consultations with experienced brokers and thorough analysis promote informed investment decisions.

3. Bank deposits in the national currency

The main mistake conservative investors make is opening a deposit account in a bank in so-called safe currencies such as USD, EUR, GBP, and CHF. The interest rates for currency deposits with the highest yields do not exceed 5% and no bank in the world can offer higher rates. On the other hand, deposit yields in the national currencies of other countries can be much more profitable. The world boasts multiple stable currencies.  If an investor earns interest on a deposit in one of these currencies, they can easily convert their earnings into any other internationally recognized currency.

To illustrate, here is a small selection of current interest rates for term bank deposits in various countries around the world:

CountryAverage interest rate and deposit term
Sri Lanka10% to 11% in LKR, 1 year
Egypt18% in EGP, 3 to 5 years
Oman3% to 5% in OMR, 1 year to 5 years
Armenia6% to 10% in AMD, 3 months to 2 years
Azerbaijan11% in AZN, 6 to 24 months

Some banks offer attractive deposit rates of over 10% in the local currency, making it a favorable investment opportunity. Yet, no matter how appealing it may seem, you should consider certain things before you engage with foreign banks:

  • What is the inflation rate in the country? If the deposit rate exceeds the inflation rate, it is profitable to open an account. For instance, as of early 2023, South Africa’s inflation rate is at 7%, while the interest rates are at 9.5% per year, making it a worthwhile deposit. Conversely, in Turkey, the typical deposit rate for TRY is 18%, but the inflation rate is 50.5%. In this situation, it would be unwise to invest.
  • May non-residents open a deposit account in the bank, or do they require a residency permit?
  • What taxes are imposed on earnings from deposit accounts?
  • What is the minimum deposit required, and how does the interest rate vary based on the deposit amount and term?
  • Are there additional benefits for the investor after they open a deposit account, such as a residency permit or citizenship?
  • What is the insured amount for savings deposits in a particular country?

4. Real estate investment trusts (REITs)

Not all real estate investment trusts (REITs) are equally profitable. The return on investment (ROI) for REIT stocks in USD can range from 4% to 6% per annum to over 18%.

No doubt, every investment fund markets itself as a trustworthy and lucrative partner and the best place to put your money as long as the investor purchases specifically its assets. Yet, you should realize that the ROI for REIT stocks primarily depends on the condition of the market. Investing in REITs means that the fund manages shared properties on behalf of trust members. Therefore, the demand for a particular property and the financial stability of tenants are crucial factors that determine future dividends.

Here’s what properties managed by different real estate investment funds include:

  • office buildings, hotels, and apartment buildings
  • senior living homes and other qualified care institutions
  • hospitals, clinics, and other medical facilities
  • communication infrastructure such as fiber-optic networks
  • industrial logistics facilities such as warehouses and distribution centers
  • personal storage facilities
  • forests and farmland
  • production facilities such as factories and foundries
  • post offices
  • retail properties
  • data centers and cellular towers
  • niche properties such as private prisons or casinos.

Below, you will find a couple of considerations for investors seeking to make profitable investments in REIT stocks:

  •  Investors should consider buying more expensive stocks as these are generally less volatile. If given a choice between a stock priced at USD 5 and one priced at USD 105, it’s advisable to choose the more expensive option. Dividends are calculated per share, so the more shares owned, the higher the total income.
  • It is important to assess the likelihood of a market downturn in a particular real estate market. For instance, investors who purchased funds that managed cinemas and nightclubs in 2019 likely experienced losses in 2020 and 2021 due to pandemic-related closures.
  • Investors should be aware of the taxes imposed on REIT stock dividends. The investor’s tax residency is irrelevant, and instead, the country in which the fund is registered is the determining factor. Most REIT companies are registered in the United States. This subjects the investor’s income to a 30% tax, resulting in significant costs. Therefore, it may be worthwhile for investors to explore partners in tax-friendly countries like Monaco.

5. Stocks

The stock market offers a range of investment opportunities, from safe but modest annual returns of 5% to 7% to potentially lucrative gains of over 30%. Your investment outcomes often depend on the expertise and skill of the broker you collaborate with. If you are comfortable with taking risks and seeking high returns, communicate this to your financial intermediary so they can help you build a diversified portfolio of high-yield investments.

Here are the principles that a well-diversified portfolio can be built on:

  • small amount of dividend stocks
  • securities from different sectors of the economy
  • portion of government bonds
  • exchange-traded fund (ETF) stocks
  • assets diversified across different countries and currencies.

To trade in the stock market, finding a reliable and experienced intermediary is crucial. Accreditation and licensing are mandatory requirements to participate in the stock market, and untrained individuals are not allowed to buy securities. The intermediaries include insurance companies, brokers, and banks, and it is better to avoid any other non-reputable participants. Reputable intermediaries always provide clear instructions on the tax responsibilities of investors, informing the latter when they may act as tax agents and when investors must manage taxes independently after earning income from securities.

6. Cryptocurrencies

Cryptocurrencies, and particularly Bitcoin, have always been known for their volatility and unpredictability. Nonetheless, certain trends in price fluctuations can be discerned. In April 2023, a significant event occurred on the market: the US government sold 16,000 confiscated BTC, which slightly weakened the currency’s value.

If BTC declines in value by at least USD 2000 to USD 3000 this year, it could be a good sign to buy and hold on to the cryptocurrency. Different analysts predict that in the coming years BTC could be worth anywhere from USD 100,000 to USD 150,000. Understandably, investors should exercise patience and cool-headedness because earning a profit from Bitcoin is a long-term game.

To maximize investment returns, ambitious individuals need to have foresight, a nuanced sense of timing and the current realities, as well as a willingness to take risks and make unconventional decisions. What is more, high percentage returns are impossible without wise financial advisors.

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