If you’re thinking about investing your money, you may still be a little unsure about it.There are many risks associated with investing, the worst case scenario of which includes losing all your money (and maybe even your retirement fund, which is especially scary if you’re approaching retirement age).So naturally you want to find ways to make investments that are going to keep your money safe and secure, yielding a healthy rate of return but not decreasing too much or too often.So here are some tips for making your investments less risky.
Before making any investments of any sort, you need to consider a few things.What are your needs and goals?What are you trying to get out of your investments (besides more money)?What is your time horizon?How long do you have before you’ll need to access your investments?Is this a long term investment or a short term?What kind of stress levels can you handle?How will you react to different things like stock market ups and downs?If you have a hard time with high stress situations, you may not be able to handle having your money in the stock market.Or, if you think you’ll be likely to check up on your stocks every single day, you may not want to put your investments in the stock market.
The reason for this is that the stock market changes everyday.This means that your investment will be going up and down all the time (but hopefully mostly up).Sometimes the stock market takes a dip and you may appear to be “losing” money.Usually, your stock will take a turn for the best and you’ll be making money again.But if you’re the type of person who will freak out every time the stock market takes a dip, you should either not track the market trends or you should consider investing elsewhere.Just remember that the greater the risk in your investment, the greater the potential return will be.
So once you’ve decided what general type of investment you’d like to make, you can begin to narrow it down to a specific type.Remember, that your best bet is probably to hire a financial consultant who specializes in this field and can offer your specific advice about what types of investments would be best for you.
Some of the best investments you can make that will keep your money safe include joint and last survivor investments, guaranteed interest investments and segregated funds.Now, what does all that mean?First, a joint and last survivor annuity is a contract under which you receive regular payments for your lifetime in exchange for payment of a single premium. It gives you more security in an investment because the period of the guaranteed-income payments is known in advance.Different types of options may be added to your annuity to adapt it to your personal needs. For example, you may decide to establish your annuity on your own life only or to have payments made to your spouse in the event of your death.
Another safe option for your investment is CDs (Certificates of Deposit).These are a FDIC insured time deposit issued by banks and brokerage firms.A CD is basically a promissory note that the back will deliver to you, meaning that you’re “loaning” your money to a back that will, at a later date, repay you with interest at the end of the term.CDs usually have a fixed rate of interest and are easy to open.However, the rate of return is not as aggressive as other investment accounts.