25 Sep 10 Investments With Low Risk And High Profit
Whether it is conventional or there is risk associated with both. As an investor, your aim is to invest in such an entity where the risk is less and the return is high. All the investments in the world have some element of risk attached to them.
There is no investment with zero risk anywhere – it just doesn’t exist.
In this article, I will share with you some investments that have a considerably lower level of risk associated with them. Not only that, but these investments can provide you with high profits too.
P2P lending stands for peer-to-peer lending. It is considered to be one of the best short-term investments available today. In this kind of an investment you do not invest any money in the shares of any particular company. On the contrary, you actually lend money to a third party, with a view to that person providing you with the desired return.
Certificate Of Deposit (CD)
The certificate of deposit is more of a saving certificate with a maturity rate which is fixed in nature. The certificate can be issued in any value, taking into consideration the minimum investment requirements. You cannot access your funds until the maturity date.
This is a kind of stock which is issued by a company. The stock is equipped with both a debt and equity portion. The preferred stock technically lies in between common stock dividends and bond payments. In comparison to common stock, the risk associated with preferred stock is much less.
Money Market Fund
A money market fund is a kind of mutual fund which is generated with the purpose of saving the investment’s value. The fund helps in the payment of interest. The ultimate goal of this fund is to maintain a VAV of $1/share. The fund has the ability to protect the underlying value of the cash.
It is unwise to compare municipal bonds with corporate bonds, the main reason being that municipal bonds are tax free. The net income of taxable bonds reduces with the rise of tax which means that a municipal bond is home to a higher after-tax yield when compared to a corporate bond.
Savings bonds are debt securities which are issued by the US Department of Treasury to assist in the payment of the government’s borrowing needs. These bonds are considered as the most secure investments because of the fact that these bonds are backed by the credit and full faith of the US government.
One of the best ways to get the highest return on a low risk investment is to target mutual funds or stocks that have a good dividend payout. For example, if there are two stocks that have a similar performance but one is giving you no dividend and the other is giving you a 2% dividend, then the latter is the best option for you.
Through a CD ladder, tying up all your cash can be avoided, especially in the case of a long-term investment. You can keep your money in both short-term and long-term CDs.
Invest In A Good Business
No matter how much a savings account may be paying, when you compare it to the return you can generate by investing in a business, it’s nothing. Try to invest in a business which has a considerable market demand and can actually make you a good profit.
These are essentially loans which you actually give to the US government. These loans get sold through different auctions. The value of the security is very much dependent on the investors. These securities can be purchased through online marketplaces and different brokers.
To learn more about secure investments take a look at this article by goodfinancialcents.com.