A low risk investment offers a much lower return than many of the riskier opportunities available. They can be a good choice for those who want to play it as safe as possible with their finances and those who aren’t necessarily looking to make massive amounts on their investments.
All sorts of investments have risk involved to a varying degree. Many investments can be affected by economic factors for example. However, there are some low risk investment opportunities that should slowly but surely improve your personal fortune.
Buying property
Purchasing a house or flat should be a low risk investment and a highly useful one. Not only will you and your family be buying a practical asset that you can live in, but due to the continuing property price boom they should go up in value so when it comes to selling, a tidy profit will be made. There are very few areas in the UK where house prices are decreasing in values, which makes them a good investment if you can afford one.
Shares in a large company
Buying stocks and shares in any company poses some amount of risk, as changes in the market or trouble for the business could see their value plummet. The safest companies to buy shares in are often the largest which have a well-established reputation, such as Apple, Microsoft and others that seem to do no bad. They may not increase by much but at least they shouldn’t lose much, if any, value over time.
Bonds
High rate bonds contain the least amount of risk and positive action in the markets can see your investment appreciate. There is an element of risk attached, especially with low rate bonds that should generally be avoided, and their value can fluctuate in line with interest rates. However, investing in bonds generally has lower risk than stocks.
Precious metals
Gold is one of the go to investments for anyone seeking a safe haven. Its value has gone up and down in recent years but on the whole they generate a positive return in the long run. Gold can be a good hedge against inflation as well and an excellent addition to any investment portfolio. Due to its history and higher price this is a better choice over silver, unless your finances cannot stretch that far.
Finally…
All investments carry some element of risk, even low risk options like these mentioned above. Before you think about investing, consider how much risk you can afford to take.
What are your thoughts on low risk versus high risk investments?
*Image courtesy of Flickr.
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1 Comment
More and more I am considering purchasing an investment property. Where I live (Twin Cities, MN, USA), housing is at a premium. We could most certainly charge more than a mortgage payment. The real question is, though, do we want to take on the liability and stress of having renters?