Stocks, bonds, etc.– what is the safest way to invest?
Morgan le Faye asked:
I’ve heard of diversifying and that some investments (like savings accounts and CD’s) simply earn interest and are supposedly completely safe, particularly if FDIC insured, but I know little about stocks, bonds, and other types of investments. What do you consider the safest investment(s) and in what combination?
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I’ve heard of diversifying and that some investments (like savings accounts and CD’s) simply earn interest and are supposedly completely safe, particularly if FDIC insured, but I know little about stocks, bonds, and other types of investments. What do you consider the safest investment(s) and in what combination?
January 27th, 2009 at 11:11 am
money market. conservative investments pay off in the long run. especially if you dont have much to work with. low risk is crucial for your success. maybe an inuety would be feasible.
January 27th, 2009 at 10:27 pm
Ranking from the safest to the riskiest would be…
CDs
MM
Bonds like T-notes
Corporate Bonds
Blue Chip Stocks
Small Cap Stocks
Index Funds or Index ETFs
Value Funds or Value ETFs
Specialty Sector Funds
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January 30th, 2009 at 5:11 pm
Know your adversion to risk ( how much you are willing to lose. I uually like mutual funds. I go for a 75% in mutual funds and 25 percent in cash. The stock market is at all time high. ( it’s over 13,000)
January 31st, 2009 at 6:43 am
What is safest depends on your time horizon for this money. Short term 5 years or less, CD’s are safest (go to for the highest CD rates in the nation). But over the long term (10+ years) you won’t be losing money with CD’s but in relation to inflation, you may lose value, or buying power. The CD return over the inflation rate may be very low. Long term, common stocks have been seen by many to give the “best” risk/return ratio. If you are very conservative and have trouble sleeping at night holding all common stocks, spreading the risk around may be the answer. Two choices may be: 1) having 30% of your money invested in Vanguard’s Total Stock Market index mutual fund (covers the entire USA stock market), 30% in Vanguard’s Total International Market index fund (covers the rest of the world) and 40% into government bonds or FDIC insured CD’s. (percentages are adjustable so you can get a good nights sleep. The 2nd choice would be some form of “guaranteed” annuity. Be advised with annuities, fees are high, returns are lower than regular mutual funds and the guarantee is only good as long as the insurance company stays in business (New York state has the toughest regulations concerning insurance company safety, so if you go this route, try to get an annuity from an insurance company that also does business in New York State.).
February 2nd, 2009 at 11:59 pm
The safest investment is a savings account, it is fdic insured. The problem with safe is that you lose money because you cannot keep up with inflation. If you have more than 10 years, there is no reason to be “safe”.
February 5th, 2009 at 3:21 am
First you’ll need to understand some basic principles of investment and understand which type of investment suits you.
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