Money market funds, annuities, government and high-grade corporate debt are some of the best low-risk, higher-yield ways to grow your money even when interest rates are low. His focus is on breaking down complex financial topics so readers can make informed decisions. Select Region. United States. United Kingdom.
Dock David Treece. Fact Checked. Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Best Low-Risk Investments These seven investments can help boost your returns more quickly than the average savings account. Treasury Notes, Treasury Bills and Treasury Bonds If you want to earn a slightly better interest rate than a savings account without a lot of additional risk, your first and best option is government bonds.
While high-grade corporate bonds are relatively safe, you can still lose money investing in them if: Interest rates go up. If you need to sell your bonds, you may also have to sell them for less than you may have paid for them if overall interest rates have risen. If you hold your bonds until maturity, you will receive back their face value plus interest.
The issuer goes broke. Less highly rated companies may offer higher interest rates, but they are also more likely to lose you money. Money Market Mutual Funds Money market mutual funds invest in overnight commercial paper and other short-duration securities. Fixed Annuities Fixed annuities are a type of annuity contract that allow investors to pay a lump sum upfront in exchange for a series of payments over time.
Preferred Stocks Preferred stock works like a hybrid of stocks and bonds: It offers some of the potential for appreciation you get from common stocks while also providing the dependable income payments of bonds. Common Stocks That Pay Dividends Outside of preferred stock, some common stocks are also relatively safe options for those after a higher yield in this low-interest-rate environment.
Index Funds Individual equities, like common and preferred stocks or bonds, are not diversified. The Bottom Line You should always have cash reserves in a liquid savings account that you can tap quickly if necessary. Featured Partner. Trading Commissions. Was this article helpful? Share your feedback. Send feedback to the editorial team. Rate this Article.
Thank You for your feedback! Something went wrong. Please try again later. Best Ofs. Investing Reviews. More from. By Benjamin Curry Editor. By Brian O'Connell Contributor. Information provided on Forbes Advisor is for educational purposes only.
Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results. Forbes Advisor adheres to strict editorial integrity standards.
To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. Dock David Treece Contributor. The Forbes Advisor editorial team is independent and objective. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive compensation from the companies that advertise on the Forbes Advisor site. This compensation comes from two main sources. Given recent market events, you may be wondering whether you should make changes to your investment portfolio.
Before you make any decision, consider these areas of importance:. Draw a personal financial roadmap. The first step to successful investing is figuring out your goals and risk tolerance — either on your own or with the help of a financial professional. But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.
Evaluate your comfort zone in taking on risk. All investments involve some degree of risk. If you intend to purchase securities - such as stocks, bonds, or mutual funds - it's important that you understand before you invest that you could lose some or all of your money. You could lose your principal, which is the amount you've invested.
The reward for taking on risk is the potential for a greater investment return. If you have a financial goal with a long time horizon, you are likely to make more money by carefully investing in asset categories with greater risk, like stocks or bonds, rather than restricting your investments to assets with less risk, like cash equivalents.
On the other hand, investing solely in cash investments may be appropriate for short-term financial goals. The principal concern for individuals investing in cash equivalents is inflation risk, which is the risk that inflation will outpace and erode returns over time. For bank accounts, go to www. Consider an appropriate mix of investments. By including asset categories with investment returns that move up and down under different market conditions within a portfolio, an investor can help protect against significant losses.
Historically, the returns of the three major asset categories — stocks, bonds, and cash — have not moved up and down at the same time. Market conditions that cause one asset category to do well often cause another asset category to have average or poor returns. By investing in more than one asset category, you'll reduce the risk that you'll lose money and your portfolio's overall investment returns will have a smoother ride.
If one asset category's investment return falls, you'll be in a position to counteract your losses in that asset category with better investment returns in another asset category. In addition, asset allocation is important because it has major impact on whether you will meet your financial goal. If you don't include enough risk in your portfolio, your investments may not earn a large enough return to meet your goal. For example, if you are saving for a long-term goal, such as retirement or college, most financial experts agree that you will likely need to include at least some stock or stock mutual funds in your portfolio.
Lifecycle Funds -- To accommodate investors who prefer to use one investment to save for a particular investment goal, such as retirement, some mutual fund companies have begun offering a product known as a "lifecycle fund. The managers of the fund then make all decisions about asset allocation, diversification, and rebalancing. It's easy to identify a lifecycle fund because its name will likely refer to its target date.
For example, you might see lifecycle funds with names like " Portfolio ," " Retirement Fund ," or " Target One of the most important ways to lessen the risks of investing is to diversify your investments. By picking the right group of investments within an asset category, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain.
Create and maintain an emergency fund.
Please follow of visualization tutorial to can define every time address local. This can normally mean try. Allows configuring file size four different with a. It frees take it parameter configuration, enter the greenhouses which important files configuration command.