Tuesday, 10 April 2012

Making the Best Safe Investment on a Pension or Fixed Income

Amid fears of losing their home and savings, many investors prefer to reduce their risks, by seeking safe investments; that promise high returns. For people on a fixed income (like a pension), seeking an investment opportunity that generates a modest financial gain, may actual be a necessity.

When looking for the best investment opportunities, people naturally seek-out profitable investments, that guarantee them a high rate of return. However, to an investor on a fixed income, the absence of risk is just as important; as the potential return. With that in mind, here are three (3) approaches to investing money, that have consistently provided a (relatively) safe investment; for apprehensive investors:

  1. The certificate of deposit is most likely the safest investment, with the highest expected return. Banks offering them, also insure them. As well, certificates of deposit can be assumed by other banks, if the bank of origin begins to suffer financially. These certificates will give a higher rate of return, than a typical savings account.
  2. Another safe opportunity for investors on fixed income, is the use of annuities. Annuities offer a high return, and are generally purchased from insurance companies. The invested money is meted out regularly, and investors are guaranteed, a specific return. Gaining more access to the invested money can prove to be a difficult process.
  3. There are a number of bond options, that some would consider to be a safe investment, and can potentially yield high returns. These include Corporate bonds, government bonds and tax free bonds. Each of these investment options provide limited risk, with a higher rate of return.

Taking the time to research a wide variety of safe investments, will lead to an increased chance of success, in the investment market. If your income is fixed, and you rely on your investing strategies to generate additional income, it is recommended that you conduct thorough investment research; before committing to any investment opportunity.


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