When most people think of low risk investments, they tend to choose from the following: Bank deposits Bank savings accounts Money market accounts Fixed income bonds Blue chip stocks Mutual funds There are however, other low risk investments to consider that, in terms of long term capital growth potential can yield far higher returns with low risk. A high yield on an investment does not necessarily mean taking a high risk. Lets look at the options and analyze the risk / reward: Bank Deposits, Money Market, Fixed Income, Savings Accounts These represent probably the lowest risk investments you can have, and their return reflects this. Your money is safe, but you are unlikely to get rich quick and your capital may not even keep pace with inflation. Mutual Funds The fact is that most asset management by professional advisors is poor over the longer term, and is unlikely to be above the 10% level and will probably be substantially lower. Blue Chip Stocks With the performance of fund managers being poor, many investors simply try to make their capital grow by picking blue chip stocks and holding them for the long term. Again, performance of this buy and long-term hold strategy normally produces poor long-term growth. What Returns can You Expect with Low Risk Investments? You already know you are not going to get rich quick (and neither should you expect to) but wouldnt you like a low risk investment that produces double-digit capital growth? Furthermore, wouldnt you like an investment that unlike the stock market has shown better capital gains longer term with lower volatility? Well, if you are considering low risk investments consider the following: UK Land - Low Risk and High Rewards Land can be considered a low risk investment and remains one of the major secrets of the worlds wealthiest investors. Donald Trump and Howard Hughes are just two investors that have made billions in this area. In fact, many of the worlds wealthiest investors have become rich from land investments. The Facts about UK Land Growth In the last 20 years UK average land values have increased by nearly 1,000% and growth in the last year exceeded 30%! Now consider this is the average growth, with careful selection of land plots capital gains achieved by astute investors have been much higher. Why You Should Invest in Land Unlike equities, the capital growth of land investments is attractive and so is the downside risk: There have been no major losing periods Growth is consistent Good gains Low downside volatility UK land looks set to appreciate further as the population continues to expand rapidly and house building continues at a rapid rate. At one time land investment was just for the wealthy. Today, there are a number of companies helping smaller investors select plots of land to buy, and investments typically start at about $10,000. Your Options with Low Risk Investments If you invest your money, you want to have a spread of different asset classes to reduce risk and increase rewards. For most investors this means money market, bank deposits, and savings accounts, fixed income bonds for security and mutual funds and equity investments for growth. It may be prudent for many investors to diversify some their investments in mutual funds into land and take advantage of higher growth rates and lower volatility. |
