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Investing for the Long Haul: Top Low-Risk Investments for 2021

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Explore the best low-risk investments for long-term investors in 2021.

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Research While many people think of investing as trying to make a short-term score in the stock market, it's long-term investing where investors can truly see their money grow. Long-term investing is all about holding onto investments for an extended period of time, ideally five to ten years or more. It's a strategy that has worked for many of the world's wealthiest people, and it's a strategy that can work for you too.

The best short-term investments provide decent returns while limiting your risk, and are ideal for money you may need in the next two, three, or five years. Short-term investments include savings accounts, certificates of deposit (CDs), money market accounts, and short-term bonds.

Low-risk investments are a great option for conservative investors who want to protect their money from potential losses while still seeing some growth. Low-risk investments include index funds, bond funds, blue-chip stocks, and dividend stocks. These investments tend to be less volatile than other types of investments, but they also tend to offer lower returns.

There is a flood of bargains within value stocks thanks to recent market volatility. Value stocks are companies that are undervalued by the market for various reasons, such as poor earnings or a tough industry environment. These stocks can represent a great opportunity for investors who are willing to do their research and take a long-term view.

While we all might love the idea of investing in risk-free stocks, there's no such thing as a stock that's 100% safe. Even the best companies can experience setbacks or downturns that can cause their stock prices to fall. That being said, some stocks are less risk than others, and these tend to be companies that are well-established, have a strong balance sheet, and pay a healthy dividend.

A reader asks: I manage my investment portfolio, largely with a very boring mix of three funds: U.S. index fund, international index fund, and bond fund. Is there anything wrong with that? The answer is no, there's nothing inherently wrong with that mix of investments. In fact, it's a very sensible approach for long-term investors who want to diversify their portfolio and minimize risk.

We rounded up a few of the top investments you might consider putting your money into this year. These investments include blue-chip stocks, real estate investment trusts (REITs), high-yield savings accounts, and index funds. Blue-chip stocks are shares in large, well-established companies that are known for their stability and reliability. REITs are companies that own and operate income-producing real estate, such as office buildings, hotels, and shopping centers. High-yield savings accounts are a type of savings account that pays a higher interest rate than a traditional savings account. Index funds are a type of mutual fund that tracks a specific market index, such as the S&P 500.

This year, many investors may be feeling plagued by ongoing inflated prices, high interest rates, and a volatile stock market. However, there are still plenty of opportunities for investors to make smart, low-risk investments. Some of the top low-risk investments for 2021 include blue-chip stocks, dividend stocks, index funds, and bond funds. These investments tend to be less volatile than other types of investments, but they also tend to offer lower returns.

What to know about 'one of the safest places you can save your money'. One of the safest places you can save your money is in a savings account at a Federal Deposit Insurance Corporation (FDIC)-insured bank. FDIC insurance protects your money in the event of a bank failure, up to $250,000 per depositor, per bank. Savings accounts are also a low-risk investment that can provide a decent return while keeping your money safe.


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