Monday, November 8, 2010

Low Risk Investing

by Robert Bell

 

As it becomes increasingly difficult to earn a buck in the current economy, many people are seeking out low-risk investments as a means to assert some control over their financial situation. Although they don’t yield as much as other investments, low-risk investments offer more security to the investor. With low-risk investments, there’s no danger of the investor draining their savings by losing a large sum of cash.

Even in a more promising economic climate, low-risk investments are still an integral part of a portfolio. They offer an opportunity to gradually profit over an extended period of time without significant financial risk, making them perfectly suited for such long-term investments as retirement portfolios.

Many low-risk options are available to the savvy investor.

Annuities

Annuities provide long-term rewards to the low-risk investor. An annuity can be purchased either with a large lump sum, or by making monthly payments over a long period of time. After an annuity is purchased, it pays off a monthly profit in return. Retirement annuities can be set up to continue paying out for an extended duration of many years. Another type of annuity, a fixed term annuity, pays off only for a pre-determined length of time. While annuities are definitely easily manageable, low-risk investments, they’re commonly combined with other low-risk investment options in order to round out a portfolio (an immediate annuity is another option to consider).
 

insurers

immediate annuity image from http://www.annuityrateshopper.com/contact/

Bonds

Bonds offer a highly secure means of investing in a company. Although corporate bonds can still be occasionally susceptible to a company going under, they remain a generally secure option. Unlike stock holders, bond holders are technically recognized as lenders. Because companies who declare bankruptcy are legally required to pay back their lenders before attending to any other matters of finance, bondholders stand a good chance of getting their money back, even if the company they’ve invested in fails. Government bonds are even safer investments, as the government is considered one of the safest institutions in which to invest.

Money Market Mutual Funds

Mutual funds are tied to the stock market, and their profitability can be just as unpredictable as the stock market itself. However, money market mutual funds are not based on the stock market; they are based on money market securities. Securities are considerably more stable than the stock market, as they pay out a fixed return over a fixed term. As a result, money market mutual funds can offer an investor much more security as a low-risk investment opportunity.

CDs

Certificates of Deposit don’t traditionally yield a huge reward but they are proven to be very solid investments with minimal risks. A CD can pay out at around seven percent so if you find yourself able to tie up a decent-sized chunk of money for a term of several years, you can safely reap a tidy profit. In addition, CDs are federally insured, making them the very definition of a low-risk investment. However, investors should be wary that prematurely cashing in a CD will certainly draw sizable fines and penalties, negating the whole investment. If you’re able to comfortably tie-up a few thousand dollars in a CD, you’ll find it to be a very safe endeavor.

 Getting Started

Thanks to the Internet, you are now able to instantly access information on thousands of low-risk investment opportunities. This allows even novice investors to comparison-shop in order to find the highest-yielding rates for low-risk investments such as securities. If you’re just getting started in the world of investing, low-risk investments are great ways to lay a stable foundation for your portfolio.

 

Annuity Rate Shopper.com has started to simplify the annuity buying process by comparing between immediate annuity rates to help figure out which one is best suited for your needs.

 

For information on immediate annuity rates click below to get a free quote:

 

CustomizedQuote

immediate annuity quote complements of http://www.annuityrateshopper.com/contact/

Thanks to Robert Bell for this great article!

 

I hope you enjoyed it!

 

~ Michele

1 comment:

  1. The emergence of money market mutual funds has allowed individual investors to take part in the money market's rates of return, which are higher than those of a savings account or other low-risk investments. The performance of a money market fund depends heavily on the interest rate situation; the best time to put your money in money market funds is when interest rates are peaking.

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