For most people especially those with limited monetary funds to expand, investments can be scary. It is common knowledge that all investments come with risks but it can prove to be a wise move to look for the investments which have decent returns with less risks involved. The secret to having a safe investment is opting for a “top dog” which has been tested by time where investment returns range from moderate to high. Think about having the following investments in your portfolio:
1. Bonds. Compared to stocks, bonds are much safer investments to shell out money on. Some people even use this type of investment as a loan to pay off a debt. The reason behind this is that stocks are investments with no guaranteed returns while bonds, like loans, have guaranteed returns and also have interest. • There is a difference between a promise and a guarantee. Bonds give you an idea of what to expect while investments offer no guarantees. • Generally, bonds are paid back before a year ends but terms can vary from one bond agreement to another. • Bigger bonds mean bigger profits but keep in mind that you will have more earnings on a bond with higher interest rates. Having said this, it may prove wiser to invest funds on a single bond with a high interest than invest in two bonds with low interests.
2. Stocks. In order to achieve a higher return, a certain level of risk must be involved like when dealing with stocks investments. To minimize the risk, invest on stocks which are relatively safe. These are defensive and constantly thriving stocks. • Companies which fall under the safer options to invest in and those which also have high values on shareholder satisfaction include McDonalds (MCD), The Procter & Gamble Company (PG), Johnson & Johnson (JNJ), Pepsi (PEP), and Wal-Mart Stores Inc. (WMT). • Investing in such defensive stocks which have already proven their profitability and longevity over time gives a certain level of security compared to investing in young and newly developed companies which can experience a harsh financial fall any moment. • Bear in mind that there are no guaranteed safe options when investing in stocks but minimizing the risk is possible by buying stocks from reputable and companies which have proven to be profitable over the years. Spreading out your risk may also be a good move. Do this by investing in long-standing and profitable mutual funds where the returns are based on a part of a whole stocks portfolio. • For long term financial plans, stocks prove to be better options. Be a cautious investor and look for a time-tested company to invest in.
3. Multi-family real estate. Because of the housing meltdown, several multi-family units are priced to move quickly and this has made investing on multi-family dwellings a great move especially now. • Compared to a single family home, multi-family dwellings prove to be safer investments because with these, you can have more tenants. Should a tenant decide to leave at the end of their agreed staying period, there are still other tenants who generate income from other units. • Multi-family dwellings earn more than single-family homes. Say you have three 2-bedroom units up for rent at $700 monthly, you can earn $2,100 in a month; in contrast with smaller income from just one tenant. When it comes to investments, real estate has always been a famous choice. If you budget for needs and maintenance of a multi-unit rental property which is fully occupied, you are guaranteed monthly returns. Bonds also present low risk but have small returns, but there are some hidden treasures available in the market which offer higher rates of interest. While stocks offer higher returns, these returns aren’t guaranteed and your investments are exposed to much greater risks. A wise tactic is to spread the return and risk through an investment portfolio where some have higher risks while others have lower risks. Don’t go for high-risk investments if you don’t have money to spend! This tactic will help you benefit from consistent and positive returns in years to come.