Maximizing Returns: The Best Investments for Your Money

When it comes to investing it's important to find the right balance between risk and return. Here we look at 12 best investments from lowest risk (savings bonds) up through medium risk (dividend stocks & real estate). Learn more about each option.

Maximizing Returns: The Best Investments for Your Money

When it comes to investing, it's important to find the right balance between risk and return. While high-yield savings accounts are considered safe investments, like CDs, there is a risk of losing purchasing power over time due to inflation, if rates are too low. You can check Bankrate's list of the best high-yield savings accounts for a maximum fee. Otherwise, banks and credit unions offer a savings account, although you might not get the best rate.

These are the 12 best investments for your consideration, generally ordered by risk, from lowest to highest. Money market mutual funds are an investment product, not to be confused with money market accounts, which are bank deposit accounts similar to savings accounts. When you invest in a money market fund, your money buys a collection of high-quality, short-term government, bank, or corporate debt. A government bond is a loan that you give to a government entity (such as the federal or municipal government) that pays investors interest on the loan for a specified period of time, usually from one to 30 years. Government bonds are a virtually risk-free investment, as they are backed by the full faith and credit of the U. S.

UU. The drawbacks? In exchange for that security, you won't get as high a return on government bonds as you would with other types of investments. Mutual funds offer investors an affordable way to diversify, spreading their money across multiple investments to protect against the losses of a single investment. An index fund is a type of investment fund that holds the stocks of a given market index (p. ex.

The objective is to provide an investment return equal to the return of the underlying index, as opposed to an actively managed investment fund that pays a professional to manage the shares of a fund. Savings bonds are one of the lowest risk types of investments. These securities are issued by the U. The Treasury and you provide a loan to help the government finance operations. Savings bonds offer a fixed interest rate paid by the U.

Government for a specific period of time. A savings account is another low-risk investment option and has the advantage of providing liquidity when you need access to your funds. The downside of savings accounts is that even most high-yield options pay an annual percentage return (APY) of less than 1%. Certificates of Deposit (CDs) are an excellent long-term, low-risk investment option. A CD account is available at your credit union or bank and, like a savings account, you can earn interest on the money you deposit. You will receive an interest rate premium in exchange for leaving your deposit intact for a certain period, which can be 6 months or 5 years.

Long-term CD accounts pay more than short-term ones. If you withdraw money before the due date, you'll pay an early withdrawal penalty. Take a look at some medium-risk investments if you want higher returns. Dividends are a form of profit sharing through which a corporation makes regular payments to its shareholders. The law does not require the payment of dividends, but companies choose to pay shareholders a portion of the money earned through a reinvestment plan or as a cash option. Investing in dividend-paying stocks can be risky if you don't know what to look for.

Always consider large corporations with a long history of low volatility and financial stability. This means that you probably have enough capital in storage to cope with market fluctuations. After you identify a stock that pays dividends, you can buy shares through your favorite brokerage agency. If you don't have a brokerage account yet, you can review the list of the best online stock brokers in Benzinga. Real estate is a popular asset class among investors looking for high returns without taking too much risk. Fortunately, there are options for investing in real estate outside of the traditional method of buying your own property.

Well-managed REITs can also generate long-term growth, in addition to paying higher-than-average dividends. As the value of properties increases, the value of REITs also tends to increase. Start by finding REITs that buy properties whose value is increasing, such as residential, industrial and self-storage properties. Untraded REITs tend to offer higher dividends and more consistent growth, but liquidity options are limited, making them best suited for people with a long-term investment strategy. Real estate crowdfunding has three actors: a sponsor that identifies, plans and supervises all investment, a collective financing platform in which the sponsor brings together investors and capital, and an investor who provides capital in exchange for part of the profits accumulated by the operation. An investment fund pools the money of several investors to buy stocks or other securities. Investment funds offer diversification benefits similar to those offered by mutual funds but with lower fees and more flexibility in terms of how much money you need to invest. It's important to match your risk profile with the company and product you're considering when investing your hard earned money.

The investment options are truly limitless, and it can be difficult to figure out where to put your money. A comprehensive risk and objective assessment can help you narrow down your options. Are you ready to make some low-risk investments? They may not have the highest returns, but they're great options if you don't want to put your money at risk. A resident in the U. UU.

Open a new individual or joint IBKR Pro account and receive a 0.25% reduction in margin loans. Search for current offers based on your criteria with Benzinga's new alternative investment analyzer.

Ruthie Cacibauda
Ruthie Cacibauda

Passionate creator. Freelance coffee geek. Unapologetic tv trailblazer. Professional internet junkie. Wannabe music lover. Hipster-friendly beer geek.

Leave a Comment

Required fields are marked *