Investing with Safety in Mind

With low-risk investment options, you have to make a compromise. Investing in them will greatly minimize any financial risk but it will also lessen your rate of return. If you are retiring, or just a few years away from retiring, low-risk investments are usually a no-brainer. 

Whether you’re near your retirement age or simply just looking for safer ways to invest your capital, here are some low-risk investment options you can look into: 

Certificates of Deposit 


Banks give out certificates of deposit that will grant you a specific interest rate over a period of time, typically six months and up to even five years. You will be penalized if you withdraw the money you deposited before your term ends. Certificates of Deposit are very low risk and are an ideal place to put your money in if you plan on making a purchase in the near future. 

Bank Savings 


Parking your cash in a savings account is very low risk however, you stand the chance of losing money if your savings account interest rate is significantly less than the rate of inflation. But savings accounts offer you the convenience of having access to your money any time you need it. 

Stable Value Funds 


Stable value funds are a low-risk investment option that aims at retaining your principal and provide liquidity so you can cash out anytime. Stable value funds are comparable to short and intermediate term bonds in terms of returns but with less fluctuations. 

Fixed Annuities 


Fixed annuities are issued by an insurance companies. This type of investment option is considered low risk because the insurance company contractually agreed to pay you a fixed interest rate. Fixed annuities are similar to certificates of deposit except, when you withdraw it prematurely you will incur a penalty tax. 

Immediate Annuities 


Immediate annuity gives you a specific amount of income by the month. Much like fixed annuities, immediate annuities are only as good as its issuing insurance company. You are exposed to risk if the insurance company goes bust. 

Why Invest in Low-Risk Investments? 


With low-risk investments, it isn’t reasonable to expect generating a considerable return. Investments that offer higher returns naturally involves a higher level of risk. 

Low-risk investment options are ideal for retirees who just want to preserve their capital. Most investors diversify their investments, starting with a majority of their investments on the high-risk side when they are young and gradually moving most of those investments to safer options as their retirement draws near.


Source link   Presented by GMOTrading

Understanding Crypto Market Cap

With 1855 Cryptocurrencies available and a total market cap of $ 212 Billion, the cryptocurrency market may be worth exploring for investors...

Futures Trading for Beginners

Futures trading can be difficult if investment strategies are not defined and applied properly. Some point to the fact that futures market is also referred...

Basics of the Technical Analysis

Technical analysis is a method used to forecast future financial price movements based on a careful study of past price movements. The method...


All You Need to Know about FTSE Futures

The FTSE is an acronym for the Financial Times and Stock Exchange index that represents the hundreds of top companies on the London Stock Exchange...

What You Should Know about FTSE 250

The FTSE 250 is an acronym for the Financial Times and Stock Exchange 250 index which represents the top FTSE 250 companies listed on the London...

What should you know about Dax 30?

The Deutscher AktienindeX or the DAX 30 represents 30 of the most liquid and large, blue chip companies in Germany. These companies are also listed...


Test to the strength of major world indices

The role of major world indices is to serve as a gauge in their countries respective stock market using relative weighted average. They have been significant...

Equity Shares and their Shared Privileges

Equity share refers to the fraction of a company's assets which gives its shareholders a part of the entrepreneurial profits, risks and ownership rights of the business...

Boosting Portfolios and Terminating Risks

In today's present world condition, we can confidently say to ourselves that we are living in times of uncertainties. In the world of financial market, uncertainties...

  


Share: