Conventional financial wisdom states that high-risk investments yield the highest returns. That generally holds with a few caveats, including the low-volatility anomaly. Most of the time, the most significant gains go to those with a stomach for real risk. This has led to the rise of risky stocks to buy.
There’s always a bull market somewhere. That’s true today, and it will remain true tomorrow and every day thereafter. Investors who want to reap the most significant rewards have to be willing to chase those gains no matter the result. Nothing is guaranteed when investing, and that’s especially relevant when investing in riskier stocks.
You can lose a lot of money, but you can also gain a lot quickly. So here are the best risky stocks to buy.
Denison Mines (DNN)
Denison Mines (NYSEAMERICAN:DNN) plays on global interest in nuclear power. Renewed interest in nuclear power has resulted in surging uranium prices over the last few months. That’s where Denison Mines enters the equation. The Toronto firm mines uranium.
The risk is obvious for any firm that depends on commodities: When prices surge, business is strong. When they fall, the opposite is true. Accurately predicting uranium prices, like any other commodity, is very difficult.
Currently, things look positive overall for uranium and, thus, for Denison Mines and its stock. Investors must be faithful to the notion that global demand for nuclear power will continue to increase. All in all, it’s one of those risky stocks to consider.
It’s a highly politicized topic overall, as is any energy policy. Recently, the conversation has tipped in favor of uranium and nuclear power. There are no guarantees that it remains tipped in that direction, which is part of the reason you’ll need a stomach of steel.
Albemarle (ALB)
Albemarle (NYSE:ALB) is another high-risk, high-return commodity stock for the aggressive. The lithium producer has had a volatile year as prices for the battery metal have dropped by 70% in 2023.
Chinese battery demand has slowed, and concerns about government subsidies here in the U.S. Renewable energy shares are also falling headwinds, making it tougher for alternative energy firms. Overall, that means Albemarle is facing a tougher time than it has in quite a while.
That’s a potential entry point for contrarian, aggressive investors. Lithium price charts tell the greater story. Albemarle’s fortunes rise and fall with the price of lithium. The firm had been aggressively pursuing lithium production assets prompted by the massive price run-up late last year. Albemarle recently left a deal to buy Liontown Resources, ostensibly due to the subsequent cratering of lithium prices this year.
Overall, it’s an opportune time to establish a position in Albemarle with the caveat that nothing is guaranteed, including a presumed price rebound.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) stock has offered investors a lot of volatility since late May. Generative AI is here, but with it comes questions about valuations and the durability of its early run upward.
It’s fair to say that the market has been seeking a reason to ding Nvidia since it threw out that $11 billion number earlier this year. The company put a target on its back. Thus far, it’s only succeeded, yet share prices have retreated since late August.
The fact is that the market feels tilted against Nvidia currently. It only got worse in recent days as the U.S. ratcheted up AI chip restrictions against China. That decision was made to slow the speed of China’s technological advances, potentially slowing a vital revenue stream.
However, the greater truth is that Nvidia benefits from the massive demand that it is struggling to meet currently. The China restrictions are more a geopolitical move than a real threat to Nvidia’s business prospects.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
