The cost of living is increasing and the need to invest our hard-earned money is imperative. And, it is obvious that everyone wants less risk and high returns since it is an investment of their hard-earned money. But it also a well-known fact that although there are many low-risk investment ideas, the high returns generating investments mostly come with high risk. Here, we have tried to compile a list of low-to-medium risk investment that gives the highest possible returns in their categories.
- Money Market Funds This is a kind of mutual fund designed for investors who do not wish to lose the principal amount of their investment. These funds aim at maintaining a Net Asset Value (NAV) of USD 1 per share and try to pay at least a minimum amount of interest so that the investment made in the funds seems worthwhile. Although there is a possibility of the NAV to drop below $1, it has a strong focus towards protecting the basic value of the principal invested and hence, losing money is rare. Investments in these funds can be made using some of the brokers like Ally Invest, TD Ameritrade, E*TRADE, among others or with banks which offer high-interest savings accounts. Although the earning may not be very high, the loss of the principal amount due to everyday fluctuations in the market is less.
- Dividend Paying Stocks and ETFs In our list, this is a medium risk plan where you will be investing in a mutual fund. The mutual fund company then diverts your money into the stocks which will have good payouts of dividends. This is an easy way to get a little more in return on your investment since due to the diversification of the stocks, the loss in one will be balanced out by the other, or you can get a cumulative profit if the market performs well. Anyway, selecting your mutual fund company isn’t easy as the risk always lies in the company itself faltering and taking your investment down along with it.
- Preferred Stocks This is another medium risk investment plan that adds to the category of dividend stock theme. These stocks are the type where the stock issuing companies have two portions to it, one portion being equity (stock) and the other being a debt portion (bond). Preferred stock can be placed between a bond payment and a common stock dividend in the hierarchy of payouts. Bond payments come first, and common stock dividends come last in the payout order of the investment. The risk associated with preferred stocks are lesser and not traded as heavily as the common stock. Preferred stocks are an alternate way to own shares in a company which will earn you payouts of dividend.
- Real estate investment trusts (REITs) This is a type of investment in real estate where there’s no need to be a landlord. The functioning of these trusts is a lot like mutual funds. The investors are given an opportunity to earn income from real estate projects by buying shares in real estate ventures. These projects can be anything like office spaces, healthcare facilities, retail space, residential properties, among others. When these real estate properties earn profits, the shareholders get their share in the form of dividends. There are many ways in which an investment in REIT can be made and Fundraise is one of the easiest and most profitable options.
