Taking risks is something that many people are afraid of when it comes to investing. People tend to want to hit it big but spend as little as possible just in case things don’t go the right way. Although there are ways of taking calculated risks, the greatest rewards tend to come from the bigger risks. All you can do, ideally, is study the market and use your gut instinct as well as hope for good fortune when you’re investing as there are no guarantees of the outcome you’ll get. If you want to play it on the safe side or have a lot at stake, then perhaps you should consider low-risk investments. That way, you’re able to make a profit but don’t have to risk it all to do so. This article will explore three low-risk investment options for you to consider.
Peer to Peer Lending
If you’re looking for a low-risk lending option, you should think about peer-to-peer lending. In case you’re wondering what that’s all about, it’s an online service that matches lenders to borrowers. You would essentially borrow someone money with interest in hopes of getting your money back. You should note, however, that there is no financial institution as an intermediary but some such as Goldman Sachs are said to constitute for 70% of all peer-to-peer loans. This also means that private investors are competing with some of the world’s largest institutions, so a thorough plan is essential. As an investor, you’re likely to get a solid return on your investment, and there are ways that you can earn up to 7%.
Treasury Inflation Protected Securities
Backed by the U.S. government, TIPS are an extremely low-risk way of investing. One of the primary reasons for this is because they’re indexed to inflation in order to protect you from its often-negative effects. TIPS can be purchased directly from the government and are paid semiannually. The minimum investment amount is $100, and they’re available in 5, 10, and 30-year maturities. If you’re unsure about the best investment options, consider Ellevest, especially if you’re a woman. This robo-advisor can help you decide which investments to make based on your financial status and aspirations, even if they’re low-risk. If you do decide to go with TIPS, you should also note that interest rates are lower than other government securities and their main advantage is inflation protection.
High-Interest Saving Account
Using a savings account as a form of low-risk investment is a common way to save. One of the reasons it may be so common is because there is no evident risk associated with this method. It may seem as though investing in a savings account isn’t worthwhile as interest rates have significantly dropped over the years. However, you can still get decent interest rates that will make you more than if your money were to be sitting in a regular current account. You can also use websites to check which banks have the best rates. These sorts of accounts generally make sense for short-term investments.
People have different reasons for investing. However, the common denominator is usually to gain something. Some hope to make millions of dollars; others are interested in making enough to save for retirement, while others are looking for a safe place to put their money. If you want low-risk investments, however, you should know that although it isn’t always the most lucrative, its possible.
