Eye-catching Low Risk Investments Right Now
In such unprecedented times of economic crisis, it’s a worrying and anxious period for everyone. Some people who may be particularly worried are investors. Our economy is facing high inflation rates so it is imperative for investors to be as prepared as possible for what could be a bumpy ride if they are not incredibly well disciplined.
If you’re looking to start investing in this current economic climate, there are a few things to consider and some opportunities may be less risky than others. Read on for this guide to low-risk investments.
What To Consider
Firstly, you want to consider what type of investor you want to be. A good place to start with this is by establishing your goals. Is this a long-term career plan, or just something for now?
Do you plan on eventually making this your primary source of income which will allow for more time and effort to be put into it, or is this more of an additional way to boost your finances?
What is your current financial position? If you are struggling to make ends meet at the moment, you perhaps want to look at only investing in lower-risk opportunities to avoid more financial strain. Or even focus on saving until you have money you can afford to take any risks with.
From this, you can then establish how much you’re looking at risking. There are benefits to both high and low-risk investments and these can often be visualised as a scale. Below is a breakdown of what this could look like:
• No risk – You’ll never lose a cent of your principal which is guaranteed no negative profit. However, no-risk investments are likely to produce a much lower profit so the risk is subtle and so is the reward. There is always some risk involved – even a ‘safe’ bank account incurs the risk of the bank collapsing.
• Some risk – Likely to incur some loss over time, however, will most likely receive much higher profits.
A clear way of establishing the difference would be to think of it like this:
• Low-risk plays = better for short-term investment plans
• High-risk investments = better suited for long-term returns
Low Risk Investments Today
If you’re planning on starting or continuing your investment journey, but want to avoid too much risk due to the current economic state of the UK, below is a list of all the best low-risk investments:
• High-yield savings accounts
• Short-term certificates of deposit
• Money market funds and accounts
• Series 1 saving bonds
• Corporate bonds
• Fixed annuities
• Preferred stocks
• Dividend-paying stocks
• Treasury bills