These days, many people talk about safe investments for cash generation. Understanding which are the best options and which are the best investments carrying high amount of risk is essential for all of us. Given below are some ideas to your advantage.
The Evergreen Gold
The glittering yellow metal is regarded to be one of the safest bets in the investment world when it comes to an economy that is prone to inflationary prices. Gold investments even act as a hedge against social and political upheavals in the world. With the Arab Spring in its full swing, and the rising fears of slow global economic growth, the sentiments in the investment world seem to be a little gloomy.
In such cases of uncertainty, gold can be rated to be among the best investments. In the last few months, gold prices have been rising at a steady pace giving investors an opportunity to make a good fortune. Moreover, the facility to buy gold in an electronic form and sell it whenever you feel like have made gold trading easier for investors as they do not have to own gold physically.
If you're a young professional, investing in mutual funds is one of the cheapest and yet better investment options, as compared to buying shares. Being a form of systematic investment, mutual funds are suitable for small investors. One can allocate a specific amount every month for this, and the rest is taken care by the fund managers. Mutual funds are collective funds, collected from a pool of investors. The collected funds are used for buying stocks, bonds, and other tools.
So, with the help of mutual funds, you can take advantage of the gains in the stock markets without taking any risk personally. Yes, since this is a collective investment managed by experts, you're guarded against the risks of market slowdown or sudden economic crisis. There are mutual funds available from reputed companies which have a good track record of making money for investors. You can choose one of these funds which has a diversified portfolio. Investing in mutual funds can be very profitable if you have a longer time horizon.
Bonds are loans advanced to corporate companies - both public and private, for carrying out their expansion plans. Companies are in constant need of capital to expand their businesses and bonds are issued for the same reason. By issuing bonds, corporations promise fixed annual returns to investors for the money raised from them. Ideally, bonds issued by government companies with significant assets, good turnover and high profitability are safe for retail investors for long term investments.
Being a resource that holds both social and economic value for people, real estate attracts huge investments from infrastructure and construction companies. Indeed, the general tendency is to buy a piece of land and wait for the right time to sell it. Being a traditional form of investment, real estate sector does give valuable returns, if the market conditions are favorable at the time of selling.
It is to be noted that as the economy recovers in the coming years, land is surely going to be costlier, resulting in escalation of realty prices giving you a big profit. If you have savings and you can afford, it is ideal to buy a property when the economy is slow, and the market value of the land is low. Because as the economy comes back on its track, real estate prices are bound to shoot up.
Fixed & Safe Returns in Saving Schemes
Saving schemes floated by banks and finance institutions can be profitable if you have time to wait for your investments to mature. They mostly offer fixed rate of return which can help you beat the rising cost of living. Beginners must try to invest in saving schemes of reputed banks, even if it is initially, a small one.
This is because it helps in preparing for a secured financial future. Investments of small amounts contribute significantly in wealth creation, much to our surprise. Bank fixed deposits which usually pay higher interest to customers can also be one of the best investments.
From this list, we ought to keep the stock markets away because of the possibility of high volatility and difficulty in predicting the pace of economic growth. Though these investments are much safer, you need to be aware of the market situation and changing economic times so that you can exit from non-performing investments and invest the same amount somewhere else.
DISCLAIMER: This article is just for reference purposes and does not recommend any investments.