What are the Lowest Risk But Highest Return Investments? is discussed in this article with 6 of such risks listed and explained.
The lowest risk with the highest return investments is not just about risk-taking but the ability to avoid unnecessary risk that could damage the image of the company and ensure that profit is maximized while cost incurred is minimized.
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1. Invest in real estate
Over the years, real estate has been classified as one of the lowest-risk but highest return investments in this century. It requires an adequate understanding of the investment platform and huge startup capital before one can commence the investment.
Thus the need for large capital often act as a discouraging factor to many businessman or oriented investors but the good news is that once an investment is made, it guarantees high returns, and very minimal risk factors can be avoided if not avoided. Real estate investments have the highest returns as it deals in assets mostly acquired and serve as a necessity to man.
Also, most real estate investment demands diversified or expanded real estate portfolio in addition to portfolio transparency.
The portfolio has transparency as its major characteristic and ensures that there is clarity in the affairs of the business without any assumptions or claims.
2. Invest in major financial or monetary mediums
One of the lowest risks is the certificate of deposit but it has the highest return on investment. A certificate of deposit is a financial medium where an individual can simply deposit his or her money for a particular period with a given or agreed rate of interest.
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The certificate of deposit has the lowest risk in the aspect of business as it does not take into consideration the period of economic shocks or recession.
If an individual deposits an amount of money during the economic boom and thereafter, there is a sudden recession, the rate of interest on that value of money will not be reduced.
It signifies that the rate of interest of the individual is not affected by economic fluctuations and as such, there is reduced risk with high returns on the value of money invested over the period.
It is also important to know that the rate of interest can increase or decrease depending on the duration as a return on a fiscal year is higher than a return every quarter and so on.
3. Invest in treasury inflation-protected securities (TIPS)
Treasury inflation-protected securities (TIPS) is a foreign investment that the US treasury deals on. It is categorized into two forms such as a stable interest rate and built-in inflation protection.
The stable interest rate remains fixed during the period of the bond and on the other hand, the built-in inflation protection is assured and ascertained by the government.
The good thing about this investment platform is that the rate of inflation matures during the period of the TIPS. During this period, the investment’s value of the individual will increase concerning its corresponding inflation rate at that period.
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4. Invest in annuities
Annuities are one of the investment platforms that assures the highest returns with the lowest risk. It also helps every investor to assist his or her financial or monetary goals. The condition for the lowest risk in annuity requires:
A. adequate knowledge about the terms and conditions of the business
B. an understanding financial advisor who is consistent in the business
C. a steady annuity portfolio that is assured
D. a defined short-term or long-term agreement
E. choose either a fixed annuity that provides a fixed return or a variable annuity that offers an adjustable or mutual annuity.
5. Invest in treasury
These treasuries include treasury notes, treasury bills, and treasury bonds. Treasury offers the investor a marginal and more preferable interest rate than a savings account.
Thus, with treasury one is assured of no extra or minimal risk with a profitable yield ranging from 2.46% to 3.58% in thirty days and a fiscal year respectively.
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The lowest-risk investment classically offers a savings account at a bank or credit union. These savings accounts are insured by the federal deposit insurance corporation (FDIC) for banks or the national credit union administration (NCUA) for credit unions, to ensure that there is no bank deception.