5 Best Investment Options For A Low-Risk Investor
A good investment portfolio must contain a balance of high-risk assets that can give you incredible returns and low-risk assets which will preserve your capital no matter how harsh the economy turns out to be. And if you are on the lookout for some low-risk investment options, then you should definitely consider the following options.
- Fixed Rate Savings Account
A fixed rate savings account will provide the investor with a steady income in the form of annual interest. Also, the deposit is 100% safe since the bank will have to return it as per the account agreement. The only challenge will be to find a savings account that provides a rate of interest that is more than the annual inflation rate in the UK. Visit the link at https://www.best-savings-rate.co.uk/fixed-rate-savings-accounts/ to find some of the best fixed rate savings account offers currently available.
- Government Bonds
Government bonds are the next best option for a low-risk investor. You will get a fixed return per year. And at the end of the maturity period, the invested amount will be returned back to you. The disadvantage is that you cannot withdraw the money you have invested until the term period is over. So, if you have invested 15,000 pounds in government bonds with a maturity period of 10 years, then you will only receive the money at the end of the 10th year. But on the upside, since the bonds are backed by the government, you can be absolutely certain of the safety of your investment.
- Certificate Of Deposit (CD)
A CD is similar to the bonds in the sense that your money will be tied up in a fixed deposit for a long period of time. In return, you will be paid a fixed return every year. The longer the term period of the CD, the more annual interest you can earn. There is also a possibility that you might be able to cash in a CD before the maturity period. But you will probably have to pay a penalty for it. Talk with your investment manager in case you wish to benefit from such options.
- Preferential Shares
Preferential shares are also a great low-risk investment option. You will receive a fixed share of dividends on a preferential basis. As such, you can be sure of getting a share of annual profits before it is paid to equity shareholders. The only downside is that your share of profits will generally be lower than the profits paid for equity shares. However, if the company goes bankrupt and its assets are liquidated, your claims will be met first, ensuring maximum safety of your investment.
- Gold
The yellow metal has always been the number one ‘safe investment’ choice of investors throughout centuries. Whenever there is any concern about the economy, investors go into overdrive to stock up their gold reserves. So, if you are looking for an absolutely safe investment that will preserve your wealth no matter how terrible the economy becomes, you should invest in gold.