While it may sometimes be wise to stick with what works for you when you invest, you need to be careful about increasing your risk through lack of diversification. Buying into what is already working can lead to over-investing in single stocks or single investing methods. Inevitably, those wins can turn to loses once they're over-invested and their value crashes down. While diversification may create a slower climb, that climb will then be more steady and reliable.
Stocks
If you do manage to develop your own consistent trick for creating high return investments with specific stocks, you could make a killing on your own and you may be find a new profession advising others. It is unlikely but not impossible to create consistent earnings through individual stock investments. Most often this occurs when you find an unknown company doing everything right in an industry where the other companies have a long and consistent history of producing high returns, or by finding a stable company that has steady, consistent returns.
Mutual Funds
When it comes to mutual funds, it often will behoove you to work with a personal broker. While some may frown at the notion of someone taking a cut of your returns, remember that this motivates them to make sure you succeed. And a professional financial advisers often have the time, connections and tools to work the market in a way you can't with your limited experience, time and resources.
Other Investment Options
To earn a high return on a loan, you need to face down either urgency or high risk. When you find an individual or company who is urgent or are deemed high risk, they won't be able to simply find a low interest rate with any lender; they will need to settle for a higher interest rate loan. One way to sort of split the different is to loan to high need businesses or individuals. High need doesn't necessarily require either risk or urgency, but it means the entity involved is likely making their own aggressive growth moves, which mean you can profit from their leaps in profitability.
For example, some lenders have made good money by lending to real estate development companies. Real estate projects often take more time and money than anticipated. Thus real estate developers are often looking for quick loans to finish their projects. Because they're nearing completion and the worst possible thing they could do is not complete something they've already put a ton of time and money into, they are willing and often able to take higher interest loans. The other benefit is that these developers will often cash out as soon as the project is done. if you obtain these sorts of lenders repeatedly, you can score constant high return investments through high interest lending.
Weigh The Reward Versus The Risk
If you really want to wade into wade into the waters of high return investments, you will need to brace yourself for some more risky endeavors. Sprinkling a few higher risk investments into your portfolio isn't necessarily a bad thing as long as you are deliberate and don't make those risky investment the centerpiece of your portfolio. I like options as they tend to trend with their underlying stock, which I've already researched and priced. Other may choose the high leverage FOREX trading field, although that has become full of corruption in the online world lately. Another favorite area are commodities, which feature high volatility (which can be good and bad) and complicated but common sense pricing factors.
So consider all these individual approaches to high return investments as you build your own strategy. Don't proceed unless you're comfortable with the risk and you have plenty of liquid capital in the bank, but sometimes you need to row out past the safe boat to earn the highest returns.
There are a variety of investments that can produce better than average returns. For more on some of these types of investments read Charles's article: High Yield Stocks
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