High-Yield & Low Risk Investments
Higher the risk, higher is the promise of return and finding low risk investments that yield high returns can be unrealistic, unless you lower your expectation. In a recessionary scenario, the investment that could be listed as 'safe' and high-yielding, tends to be quite scarce.
The recommended plan of action in such a scenario is to invest a sizable amount of your savings into low risk, moderate yield investment and a small portion in relatively high risk options like stocks, bonds and mutual funds. Here are some of the safest investments offering high yields, which you could think about.
Individual Retirement Accounts
If you are planning for retirement, there is no better way to invest your money than in an individual retirement account (IRA). On a technical level, a traditional IRA or a Roth IRA is not really an investment vehicle, but only a savings account. However, it does earn you an interest like a bank savings account.
IRAs are the safest investment options you could opt for and can provide a moderately high yield in the long turn due to the tax exemption. You can invest the money saved there, in certificates of deposit, which has been discussed further.
Certificates of Deposit
An IRA CD (certificate of deposit) is a type of time deposit that can yield high returns. Look for banks and credit institutions offering high IRA CD interest rates, with time periods ranging from 6 months to more than 5 years.
Fixed or Variable Annuities
Annuities are an insurance instrument which can provide a regular source of income in the long term. After you have made a lump sum or piecewise investment through installments in an annuity, it starts paying back periodic returns after a fixed period of time. You could opt for fixed or variable annuities that can generate high returns in the long term.
A tax lien is the right over a property that a government may exercise when tax debt lies unpaid for long. Most US state governments sell tax lien certificates that earn at least a minimum of 5% return for the buyer and also the opportunity to buy the foreclosed property on which the lien has been imposed.
These are investment options that give relatively high returns. Any option involving securities like stocks and bonds have high risk, which hardly makes them 'safe'. You may find people suggesting to invest in raw land development, but with the present condition of real estate market, it is not good to invest in it, as liquidation of asset can be difficult.
It's best to opt for low risk options like certificates of deposit or invest in gold and silver, which are continuously on a high growth curve. Take advice from an experienced financial adviser who can suggest you with investment options that are well aligned with your future plans and the seed capital that you are ready to invest.