- March 19, 2019
In uncertain economic times and volatile financial markets, some investors may want to explore low-risk ventures. There are several products which will meet the needs of the risk-averse investor but there is only so much one can gain from these types of investments. Nevertheless all low-risk investments are not the same as some offer higher returns while others do not perform in this manner.
Fixed Deposits, Cash Valued Life Insurance, Money Market Funds
These types of instruments allow the investor to gain some interest on their investment over a period of time. Fixed deposits can allow clients to deposit as much as they want with a stable or unwavering interest rate e.g. 3.5 to 5 percent. Cash valued life insurance has components of fixed deposit whereby the policyholder’s money can gain interest over a period of time and upon maturity they can see a significant payout. The Money Market Fund is an open-ended mutual fund that invests in short-term debt securities. It usually consists of certificates of deposits (CDs), treasury bills and commercial paper. Money Market Funds can however have a down side - service fees can be significant and inflation can affect earnings from year to year.
In these cases, interest can be withdrawn which gives individuals flexibility in their personal finances. However for persons who are looking to gain a bit more, these types of investments may not create an adequate level of return.
Diversify Your Investments
Financial advisors suggest the best way of investing is to spread your money around and place it in a variety of instruments. This can be done by examining the idea of including peer to peer lending, bonds as well as some equity and real estate. If you want higher returns, there must be a higher degree of risk. Consult with your advisor with respect to your financial goals and assess your portfolio regularly.
Sources
https://www.investopedia.com/articles/mutualfund/08/money-market.asp
https://www.benzinga.com/investing/best-low-risk-investments/
https://bse.com.bb/wp-content/uploads/2017/12/BSE-Guide-For-Investors.pdf
https://www.bankrate.com/investing/low-risk-investments/