Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
5 ‘Risky’ Investments That Have Outperformed the S&P 500
Ruby Layram
15th Jul 2025
Although trackers are great (I personally love them!), they are a bit of the ‘safe’ side. The S&P 500 is one of the most popular index tracker funds that tracks US stock market giants, such as Apple, Microsoft and Tesla. It’s a popular choice amongst investors.
But, is it always the best place to put your money?
If you’re looking for long-term growth, putting your money into slightly ‘riskier’ investments could lead to better returns. In this guide, we will take a look at 5 ‘risky’ investments that have outperformed the S&P 500.
1. Private Equity
CalPERS, America’s biggest public pension fund, reported a rare 11.6% return in its latest fiscal year, powered largely by private equity holdings returning about 14.3% .
That beat public equities for them, suggesting private assets can outperform, but only when you’re big enough to get in on the deal. Yes, it’s complex and illiquid, but for those who can access it (via funds or alternatives), private equity remains a tempting option.
2. Silver
The underdog of the precious metal world, Silver, has produced some excellent returns over the last few years.
Thanks to booming AI, EVs, and industrial demand, silver has outpaced the S&P recently. It’s used in everything from semiconductors to solar panels, and specialists are calling it a trade, not a long-term hold, because of its sensitivity to economic shifts.
In short, silver can outperform gold and stocks, especially when tech and green energy are firing. But it’s volatile by nature, so timing really counts.
3. Bitcoin
Bitcoin has had several moments in its volatile history where it’s left the S&P 500 in the dust. A standout example was in 2020, while the S&P 500 gained around 16%, Bitcoin soared by over 300% as investors piled into digital assets amid pandemic-induced money printing and economic uncertainty.
The trend continued into early 2021, with Bitcoin hitting record highs and cementing its role as a high-risk, high-reward asset.
While it’s certainly not for the cautious investor, those who bought the dip and held on tight have, at times, seen far greater returns than traditional stockholders.
4. Peer-to-Peer lending
This one is for investors with a pretty good risk appetite! Some peer-to-peer platforms offer returns of over 10%, which would outpace the S&P 500 in certain market conditions.
Peer-to-peer lending involves lending your money directly to borrowers and earning interest on repayments. You basically play the role of banker.
The risk comes if borrowers cannot pay you back. However, peer-to-peer has been around for decades, and most platforms take precautions to make sure that this doesn’t happen.
I wouldn’t recommend putting all of your money into P2P. However, it might be worth allocating a percentage of your cash that you can afford to lose.
5. House Flipping
House flipping is a more manual way of making a return on your investment (better prepare your toolkit!). It involves buying a rundown house, doing it up, and selling it for a profit.
Depending on the amount of work you put into it, you could make a pretty good return! Most house flippers aim for returns of 20% or more. However, nothing is ever guaranteed!
It’s worth noting the amount of time and effort that goes into flipping a house. It’s certainly not passive!
You should also be wary of the current housing market to make sure that you don’t accidentally buy before a crash.
How to Find Investments with High Growth Potential
If you’re after juicy returns, you’ll need to look beyond the usual household names. Growth investments are often found in companies or sectors that are innovating fast, tapping into future trends, or simply scaling up from a strong base.
That doesn’t mean gambling on the next big thing without doing your homework, but it does mean learning how to spot early signs of potential.
Look at emerging industries
One way to get started is by keeping your eye on emerging industries, such as artificial intelligence, clean energy, biotech, and digital infrastructure. These areas are attracting big investment, and while they can be volatile, they’re also bursting with long-term upside.
It’s also worth checking out smaller-cap UK companies (look at the FTSE 250 and even the AIM market). These businesses often fly under the radar but can deliver spectacular growth when things go right.
Look where the money is going
It helps to follow the money, too. Read what fund managers and analysts are backing, and check which sectors are being tipped for expansion over the next 5 to 10 years. Look at earnings growth, company leadership, and whether they’ve got a competitive edge.
And remember, growth stocks won’t usually pay big dividends, so your returns come from price appreciation over time.
Oh, and don’t forget to spread your bets. Even if one pick explodes in value, you’ll want a few others to balance out the risk. Growth investing can be exciting, but a little caution goes a long way when the markets wobble.
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