8 Low Risk Investments explains eight places to invest your money with low risk. You will find this article helpful and informative.
Are you looking for where you can invest your money with little or no risks? Here are a few financial instruments that people who are risk-aversed may think of investing in.
1. Treasury Securities
This is a financial instrument that is overseen by the government and it is often less risky. Because in the case of the fall of the economy, the government can always print money to repay those who invested. Therefore, the possibility of losing your money is considerably low.
But it is worthy of note to know that the Return on investment for this investment is below average therefore, you should consider your age and other factors before investing your money, and as a matter of fact, you should only invest in it as an option and not a primary source of income generation.
2. Stocks that pay dividends
These two are usually less risky when you compare them to those that do not because even when the stocks decrease in value, the dividends that you gather over time will guide you against any form of financial loss.
But before you invest, it is important to know and understudy the company first and know if they have a dividend policy that will suit your needs financially, and if they do not, it is not out of place to move on.
3. Preferred Stocks
These kinds of stocks are usually given more preference than ordinary stocks because immediately the bondholders are sorted out, they receive their pay.
As a result of this should the company be pushed out of business, the preferred stockholders always get paid off before the other shareholders when the assets of the company are being sold out and liquidated?
4. Fixed Annuities
This is a kind of insurance contract that pays the holder a guaranteed interest rate on all of their contribution. The reverse kind of this investment is called variable annuities.
One unique thing about these investments is that they are very simple and easy to predict. You can go into it whether you understand the stock market or not as long as you know what to expect based on what you agreed upon. This kind of investment they are paid for as long as the company remains in a position to do the same.
5. Money Market Accounts
You can equally invest in Money market accounts which is a kind of account that is provided by banks. This account provides interest at a rate that is higher than the normal savings accounts that we all know. Because of the insurance protection in this account, the risk in it is very less.
Read Also: 15 Best Ways to Invest Your Money in Nigeria
6. Corporate Bonds
This is a kind of financial debt security that is often issued by a firm and sold to those who want to invest. The investors get a fixed or variable interest on all of their investments and they also receive their investment capital when it has matured. If the issuer of the bond is an established firm in the market, this investment involves very low risk.
7. Certificates of Deposits (CDs)
This is a kind of product that is given by many institutions that take deposits. They give out mouth-watering interest to the investor as long as he agrees to leave the money untouched in their care for a stipulated period of time.
8. Value Funds
Just like the name implies, this has a lot to do with analyzing the value of shares and when they are undervalued, you put the money in them.
Read Also: Businesses You Can Start Without Capital
This involves very low risk because they are often sold at a very discounted price but when the market goes back to normal, they bring returns. However, it takes someone who is very skilled to invest profitably in value funds.