subject: Investment V/s Risk [print this page] While it may seem risky to invest in todays market, there are actually numerous low-risk options of investment that will help you get considerable returns on your money. The stock market although has still to recover the effects of the economic slowdown yet this unstable market offers you a great opportunity to invest in low-risk segments.
Less Risky Options For Investing
While a certain percentage of risk always accompanies any kind of investment, there still are 4 categories that exhibit stable rates and offer guaranteed returns compared to certain unpredictable segments in the stock market. But you must also remember that investing your money in a less risky opportunity will also mean that you will only get lower returns than live stock. Now let us take a look into these 4 relatively safer investment options:
o Bonds
Bonds offer a fairly consistent option for amassing interest. When you invest your money into an entity managed by the government or municipal corporations, you get a bond or an I.O.U. in return. You will receive interest payments during the active life period of the bond. When your bond matures, you can reclaim the principal amount. Usually bonds come with a fixed interest rate. Bonds can also be traded like stocks.
o CDs
These are not your music CDs. It refers to Certificates of Deposit. You can buy a CD from your bank for whatever amount you wish to invest and then decide the lifetime of your CD along with the banking officers. Basically, you can buy a CD for the interest rate the bank is offering you and then receive the interest payments during the active lifetime of your CD. Once the lifespan of the CD is over, the bank will repay the original deposit. However, if you need to terminate this investment and reclaim your money earlier, you may have to pay some amount to the bank.
o Money market mutual funds
Compared to traditional mutual funds that are invested in the stock market, money market mutual funds are steadier since they are invested in reliable cash assets that grow at a rate of about 5 percent per year. Because these mutual funds are associated with the money market, they are less risky and more predictable than mutual funds associated with the stock market.
o Savings accounts
Investing in a savings bank account is also a good idea. These savings accounts also offer you an interest on your deposit. However the interest rate may not be very high. One plus point of investing in savings accounts is that your money will be more accessible than if invested in CDs or bonds while still gaining interest. An online savings account will help you enjoy more control over it.
Now that you are familiar with some less-risky investment opportunities, why not use them to make your money grow?
by: AlenCaller
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