Are there safe investment options when you cannot afford a loss?
Believe it or not, there are some investment options that are safer than others when you cannot afford encountering any financial loss. These provide opportunities for significant growth for those investors who are looking to realize a substantial yield over a shorter period of time, usually less than a 5-year time frame.
These are also viable avenues for investors who want to protect their investments against the loss of that capital as being the primary objective. If you are attempting to fund your children’s educations or secure more retirement earnings, some of these options are an excellent way to achieve your goals.
Risk profile with investing
All investments involve risk, whether it is something as safe as US savings bonds or highly volatile stocks. Typically, risk profiles are established once you set up an investment account whether offline or online, with a regular broker, one of the binary options brokers or others.
This profile enables the investment professional you are dealing with to ascertain the best investments possibilities relative the risk tolerance abilities of the investor concerned. Remember that risk is classified from high to low. The low end involves an investor who is incapable of tolerating risk versus the high end which is associated with aggressive investors.
3 of the most common safe investment options to consider
The following 3 different options should be considered if you need to minimize your risk as well as needing a safer avenue of investment:
Bonds – money market securities typically exhibit lower returns or yields on an investment compared to bonds. Depending on what entity is issuing the bonds, most risk factors are fairly modest where bonds are concerned. The lowest amount of risk you will encounter is with US Treasury bonds followed by municipal and then corporate bonds. The average rate of yield on these different bonds is typically 2.5% to 3%.
Cash and/or money market securities – this category of investment is currently viewed as the safest type of investment and includes financial instruments such as CD’s. The key to these investments is that they offer better liquidity as well as a safer way to protect the investment’s principal. Additionally, you need to be willing to exchange those returns for easier access to your funds.
Penny stocks – despite the volatility that exists in today’s stock market, certain stocks are less risky than others. Penny stocks are considerably less risky where losing money is concerned and could result in tremendous financial gains. So it follows suit that you should also consider this option, provided you have done sufficient research and know what you are doing when “playing the market.”