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Low risk fixed income investments

low riskIf you have made good profits playing online poker or through other means, you should save a part of it in a low-risk vehicle so that it is still there when you retire.

High risk investments are exactly as the name implies, very risky. Yet they also have the potential to payback large earnings if purchased and sold correctly. High-risk investments require that the trader be very smart and learn the right timing involved for buying and then selling those stocks.

Conversely, low-risk investments carry little or no risk and are typically held onto for the long term. Additionally, low risk investments produce smaller yields but they do display steady growth patterns.

What types of investments are considered low-risk?

There are six types of investments which we have categorized as being low-risk fixed income investments and should be considered for your investment portfolio. These include bonds, CD’s (Certificates of Deposit), ETF’s (Exchange Traded Funds), real estate, standard passbook savings accounts, and US savings bonds.

Bonds – these are considered to be one of the less risky ways of investing in a business because should the company fail and declare bankruptcy, the corporation must attempt to pay off its lenders first. When purchasing bonds, you are basically lending your money to a corporation. In return for lending that business the money, you are paid dividends or a set rate of interest.

CD’s – CD’s can be held for as short a time period as 90 days up to 5 years. You are investing your money into an account that is going to pay you back at a rate of interest that is agreed upon prior to opening the account.

ETF’s – although these are viewed as stock funds, they are considerably less risky so they are considered a viable type of low-risk investment. Additionally, ETF’s track the three major stock indexes – the DOW, NASDAQ, and the S&P 500.

Real estate – purchasing a home or property has always been considered to be a very wise low-risk investment and has been for decades. For all intensive purposes, real estate is one of the most practical and safest ways to invest your money.

Standard passbook savings accounts – despite the fact that interest rates have slightly rebounded from all-time lows, this is still one of the safest ways to invest your money. Plus, your funds are insured by the FDIC (Federal Deposit Insurance Corporation) for up to $250,000 per depositor.

US savings bonds – considered as another low-risk, safe investment and are issued by the US Treasury. Just like with CD’s or savings accounts, the money you invest is protected by the Federal Government.


Thursday, March 7th, 2013 online gambling