By halifaxwebcam July 12, 2014 Leave a Comment

U.S savings bondsAs you are probably aware all investment carries an element of risk, it can be a hard act trying to balance risks and returns especially when the market is so volatile.

Although it is tempting to invest in safe investments, it should be realised that these will not provide you with any high returns and are often a long term option. If you are looking for high returns then you will need to be brave and invest in riskier investments.

If you would rather play it safe then there are low risk options you can look into such as certificates of deposit, treasury inflation protected securities, money market funds, municipal bonds, U.S savings bonds, annuities and cash value life insurance. These are not exciting options to invest in but as a backbone to your portfolio could prevent you losing all your money. The best bet is to have a portfolio of safe options and spice this up with some high risk investments on a smaller scale.

Some investors would argue that there is no such thing as risk free investment and that even so called safe options can crash. The types of risks that are inherent in investment include market risk, purchase power risk, interest rate risk, shortfall risk, timing risk, liquidity risk, political risk and societal risk. If you are thinking about dipping your toe into the world of investment it is worth becoming familiar with all these terms to help give you a better chance of finding investments which work for you.

Thinking about getting into investment is an ideal time for you to tidy up all your finances. Look at your incoming and outgoing expenditure to see if there are any savings to be made. It is about making your money work for you. You may be able to negotiate better credit card interest rates, cut down on insurance costs etc. which will give you a bit of extra money to put into your investment portfolio.

When looking to invest it is important to determine whether you can afford to do it. Set yourself a budget amount to invest, for example $1000 dollars. This is a great platform amount to start from and will enable you to see if investments are the right path for you.

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