Are you looking for a stable and safe investment that won’t pour your money down the drain? Well, these 8 safe investments with high returns are just for you!
All investors have one sole goal; to generate high returns. However, most high returns are provided by high-risk investments, risks that not all investors are willing to take. The good thing is that you don’t have to compromise and invest in high-risk investments just to make high returns. Why do we say so?
Fortunately, the stock market offers safe investments with relatively high returns (markets fluctuate so returns can vary).
Consider 8 such investments that provide high returns while protecting your money:
1. Treasury Bonds
Also known as T-bonds, treasury bonds are backed and guaranteed by the credit of the United States government. Like with the certificate of deposit (CD), you invest for a specific period, say between one month to 30 years. Also, the investment is paid out at a set interest rate.
When you invest with treasury bonds, you can expect to earn coupon payments regularly, based on the set interest rate. Also, you get to withdraw the original amount you invested when the treasury bond matures.
2. Fixed Annuities
Fixed annuities are contracts made with insurance companies. Investors usually make an upfront payment. Then, the insurance company pays them a set amount of income over an agreed time.
For example, an annuity can be set so that the investor is paid over 30 years or until their death. On the other hand, fixed annuities are a good investment because they provide a steady income and secure returns.
3. S&P 500 Index Fund
The best stock research tools recommend the S&P 500 index fund as an ideal safe investment. Index funds help you diversify your portfolio, minimizing your risk of loss.
For example, you can buy index funds that hold stock for different companies rather than invest in a single company. By doing so, you lower your risk of losses if one company goes bankrupt.
4. Municipal Bonds
Municipal bonds are usually offered by governments, both local and state governments. Compared with other bonds and safe investments, these bonds have slightly higher returns and more risk.
However, despite their slightly increased risk, municipal bonds offer the advantage of not being taxed. Therefore, this is a perfect investment for those looking to invest and gain better returns while keeping their tax bill low.
5. Money Market Accounts
Money market accounts offer similar benefits to savings accounts, such as interest payments and debit cards. The only difference is that these accounts have higher minimum deposit charges than regular savings accounts. Therefore, you can expect to earn higher returns when investing with a money market account. Besides, you will have the flexibility to withdraw and use the cash whenever need be.
6. Series I Savings Bonds
A series I savings bond is a non-marketable, low-risk bond that adjusts with inflation. For example, when inflation falls, the interest rate and returns fall. On the other hand, when inflation rises, the bond’s payment adjusts upwards.
Therefore, invest with the series I bonds if you are looking for an investment that will protect you against inflation and the ravages of rising prices. After all, the bond adds an inflation rate payment every six months, which means a sizeable yield if the inflation levels are high.
7. Preferred Stocks
While preferred stocks are slightly riskier than most other bonds, they are safer than stocks. Usually, holders of preferred stocks receive payments before stockholders but after bondholders. This is why preferred stocks are also known as hybrid securities.
The good thing about preferred stocks is that they provide a regular cash payment. However, since these trade on the stock exchange, use stock advisory newsletters to get stock market tips and industry recommendations to analyse them before buying.
8. Dividend Stocks
Dividends are cash payments given to shareholders regularly. As a result, and contrary to owning stocks in a single company, dividend stocks offer steady returns, regardless of whether the market is market stocks are up or down.
In fact, even when the stock’s share value is underperforming, you can still expect to get some returns. Dividend stocks are best for investors looking to engage in long-term investments that produce a regular income stream.
If you have a low-risk tolerance, then these 8 safe investments with high returns are an ideal investment choice for you. Try one of these investments by yourself as a financial trader or with established investment banks, and even diversify your investments, and you will never have to worry about losing huge amounts of money if you’re prepared to take some risks as with all investments.
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