Strategies to adopt if you want higher return with lower risk – Tips for investors

Investments

Whenever the financial markets get unsettled, the investors keep watching out for the low risk investments. If you’re someone who is retired or you’re just looking for the safest way to become an investor, you must be hunting for the no-risk investments like certificates of deposit, money market funds or the US Treasury certificates. While you may feel interested in them, you may already be aware of the fact that these investments aren’t going to give you anything worthwhile in return which you have been seeking all the while.

You are fortunate enough to know that there are few worthy investments which offer high return despite letting you incur low risk. You can even get better returns on few of the investments if you decide to hold them in a Roth IRA. Here are few investment options to check out.

#1: Dividend-paying stocks

There are many companies which pay dividend yields which are way higher than the amount that you will get on investments which are totally risk-free. For instance, you must be familiar with GSK or GlaxoSmithKline which pays a yield of 6% on dividend while another company called Iron Mountain pays around 6%. When you invest in dividend paying stocks, you can even participate in the capital gains. This is besides the income from dividend that you receive.

#2: Preferred stocks

This is a sub-category and according to the expert financial planners, the preferred stocks also have different bond advantages in the way that they trade in a tough range. They pay a moderate dividend and their position is much higher in the capital list than equity. This is altogether a different way of playing with dividend stocks and this is a way to do with lower risk. Preferred stocks are hybrid between bonds and stocks. They are even more vital when a company has fallen down during tough times.

#3: Peer-to-peer loans

These are commonly called P2P loans and off late, this type has been taking the world of investment by storm since the last few years. The financial meltdown is the reason behind the popularity of this kind of lending as banks became extremely hesitant in lending personal loans, especially to small businesses and other individuals. From the perspective of investment, P2P offered a welcome relief of interest rates from the almost 0 interest rates which existed since 2009. People came to online lending platforms, secured loans for different purposes and the investors funded them.

#4: Annuities

As long as investing in annuities are concerned, there is lot of hesitation. Since the fees are highest that are associated with them, they often become over-hyped and they’re promoted in such a manner that they can answer everyone’s needs, irrespective of their own needs. However annuities offer a high return and low-risk investment.
Therefore, if you’re wondering about the ways in which you can invest high returns despite taking low risk, you can choose any of the above mentioned investment assets.