For you to succeed with your investments, you need to have a diversified portfolio. You must not have all big risk investments, always try to maintain a balanced portfolio by adding low risks investments to high-risk investments.
Different types of investment activities need to be part of your portfolio. Although some people don’t believe that you can make a substantial amount of money from low-risk investments, it is possible that you make huge profits while keeping the risks minimal. Some of the best low-risk investments with high returns are:
- Preferred Stocks :
Investing your money into preferred stocks is a good example of low-risk investments with high returns. This is because a preferred stocks holder has a more minimized risk than a common stocks holder. For instance, when a company hits the rocks, the preferred stock will be paid first of its dividend before common stock. You need to know about the investment company you invest in to guarantee a low-risk investment.
- Stocks that Pay Dividends :
You can be able to make a good profit from this type of investment while avoiding risk. This type of stock pays you in cash dividends and is relatively mature and stable, therefore minimizing risk.
- Exchange-Traded Funds :
Exchange-traded funds are another good option that has low risks but gives high yields. An interesting thing about this investment option is that it has a subdivision of several other investments which automatically diversify your portfolio giving you an advantage.
- Certificates Of Deposits :
This is a low-risk investment that brings you profits especially when you invest long term. It is advisable to invest money you won’t need in the nearest future in this type of investment. Certificate of deposit is insured and also has a time frame of which if you withdraw your money before the time frame, you will pay a penalty. This type of investment will give you a high return although it is not too risky.
- Municipal Bond Funds :
The source of this type of bond is the states. There is no payment of the tax required for this type of investment. Once you invest in this type of bond, you don’t need to worry about the individual assets it’s going to be invested in. Because the state can never go into bankruptcy, this investment option is relatively less risky and has high yields.
- Rental Housing
This falls into the category of real estate although not entirely. In order not to have problems with finance after retirement, one is advised to have this type of investment. Although this type of investment is long-term, it gives a lot of profits while keeping the risks low. It is amazing how this investment can go on to give you a very high profit.
When it comes to investing, the higher the risk the higher the chance of getting more profit. But there are some low-risk investments such as certificates of deposit, Municipal bonds, rental housing, preferred stocks, exchange-traded funds, etc where you can Invest and still get high returns.