21-Jan-14
Although there is no such thing as a risk-free investment, low risk investment strategy is there. If your portfolio is too dependent on stocks and other risks of the method , its diversity, even out the ups and downs is a good idea . Do not forget the 2008 and 2009 stock market crash , in this country eliminated six trillion U.S. dollars worth of wealth . As you approach retirement , low risk investment becomes more important , you can not afford to lose your savings.
The following is a low- risk strategy that will get you your money in a decent return without rolling the dice .
1 . Dividend Stocks
While not all companies offer a dividend stock holders , a lot of things . Of course, you probably do not want to buy the highest yield dividend stocks just for yourself , it may be because high-yield high- risk. A good place to look is in the pharmaceutical , utilities, energy and telecommunications to more than 6% yield major blue chip companies.
2 . High-yield bonds
"Junk" bonds earned their name as early as the time of acquisition , are all the rage in the 1980s. Buy a company's low credit rating debt issued does introduce risk because the chance you take , the company will not last long enough to repay the principal. You can risk in this market is relatively low , through exchange-traded funds , in order to improve your portfolio returns.
3 . Foreign stocks and bonds
Many foreign companies and governments are not junk , but simply face the same credibility problem , because companies in the above example. This means that they pay a higher interest rate than what you see in the United States . If you limit the size of your holdings , it is a good way to improve your yield .
4 . Commodity
Investment in oil , precious metals and crops traditionally reliable hedge against inflation. You can invest in some commodities, such as gold directly . With others, it is more practical to buy shares of commodity producers or track commodity prices and derivatives. Note: This strategy is best if you are worried about inflation, but you do not care about the wild price movements.
5. Long and short term bond funds
This type of fund to buy long-term bonds and sell short certain bonds . Borrowing from the broker bonds and securities sold into the market , hoping the price of the bond will fall , so the funds can repurchase it at a lower price : bond using the same method , short stocks shorted. This strategy is a good choice if you are worried about higher interest rates , but if you want some investment in bonds.
6. Mutual Funds
Mutual fund investment strategy has long been to go to , in a good market substantial profits and limit losses in bad markets. Not all mutual funds or equivalent , however , and some are designed for high -risk investors. Looking for funds, strong, stable returns and have received at least three stars from Morningstar those records .
7 . Certificates of Deposit
Deposits (CDS) certificate may be boring, but they also have a direct and low-risk method to protect your money. You can trade funds from credit unions or banks, credit your account within a specific time to buy CD. In return , you will get a set interest rate will not change, no matter what happened in the interest rate . You also locked in until maturity certificates of deposit , unless you want to advance to withdraw the equivalent of a three-month interest penalty .
CD is a low risk , because you can definitely get your principal back if you are using an FDIC-insured institution , your deposits at 250,000. The greatest risk is to lock a CD of your money, only to find your " real" return, adjusted for inflation , is minimal.
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