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8 Safe Investments with High Returns for Risk-Averse Investors

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Looking for safe investments with high returns? Here are 8 options for risk-averse investors.

safe investments with high returns

When it comes to investing, everyone wants high returns. However, with high returns, come high risks. As the economy faces high inflation and the Federal Reserve raises interest rates in an effort to limit the rise in prices, the U.S. could be heading towards a period of uncertainty. This makes it important for investors to look for safe investments that offer high returns.

When considering investment options, you should weigh the potential returns and the risk involved. Here are some of the best safe investments with high returns for risk-averse investors.

  1. High-Yield Savings Accounts: An FDIC-insured savings account that offers higher interest rates than traditional savings accounts.

  • Certificates of Deposit (CDs): A time deposit with a fixed interest rate and fixed maturity date that is FDIC-insured.

  • Money Market Funds: A mutual fund that invests in short-term, low-risk investments like government bonds and commercial paper.

  • Government Bonds: Debt securities issued by the U.S. government that are considered one of the safest investments.

  • Corporate Bonds: Debt securities issued by corporations that offer higher returns than government bonds but come with more risks.

  • Municipal Bonds: Debt securities issued by states, cities, and other municipalities that are tax-exempt and considered relatively safe.

  • Dividend-Paying Stocks: Stocks of companies that pay dividends to shareholders, offering a steady stream of income.

  • Real Estate Investment Trusts (REITs): A company that owns and manages income-producing real estate and distributes the profits to shareholders.

  • If you're looking for safe havens from tough markets, these safe investments offer lower risk than stocks. They can provide a stable source of income and help protect your portfolio from market volatility.

    Rick Rieder, chief investment officer of global fixed income at BlackRock, has been in the bond market since 1987, and he's seeing a set of unique circumstances that make bonds an attractive investment option. Inflation is high, but so are interest rates. This creates an opportunity for investors to earn high returns without taking on excessive risk.

    Investors approaching retirement, or who are already retired, should typically look for securities or other products that generate income to help supplement their retirement income. Safe investments like CDs, bonds, and dividend-paying stocks can provide a steady stream of income in retirement.

    So-called 'toxic investments' gained notoriety during the 2008 financial crisis because they seemed to be everywhere. These investments, like subprime mortgages, were high-risk and caused significant losses for investors. It's important to avoid these types of investments and stick to safer options.

    If you're looking to invest money for the short term, you're probably searching for a safe place to put your cash so it's there when you need it. High-yield savings accounts and CDs are great options for short-term investments because they offer higher interest rates than traditional savings accounts and are FDIC-insured.

    In conclusion, safe investments with high returns are possible, but they require a careful balancing act between risk and reward. By investing in safe options like high-yield savings accounts, CDs, money market funds, government bonds, corporate bonds, municipal bonds, dividend-paying stocks, and REITs, you can generate high returns while protecting your portfolio from market volatility.

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