High Risk, Moderate Risk and Low Risk Investments

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For those looking to invest, be aware that many investments can be categorized into three categories: high risk, moderate risk, and low risk. Investing is not difficult, but you must always think about it and plan. It is also extremely important to learn about the many investments available to find the ones that best fit your situation and lifestyle. Here are some tips on the three categories of investment:

Low Risk Investments

Low risk investments are generally very low profile and rarely extremely glitzy or publicized, but they offer cautious investors a way to save money. money in the short term. or in the long run without the risk that you find in other forms of investment. Low risk investments generally offer the lowest returns, but are much less volatile than many other types of investments. Low risk investments include money market funds, certificates of deposit and certain types of bonds. Low risk investments are perfect for those who want to make sure their money stays safe. Although low risk investments do not offer high returns, they offer stability and security to those who can not afford to lose money or simply wish to avoid as much risk as possible. Expect low-risk investments to yield returns of between 1% and 5% a year.

Moderate Risk Investments

Moderate risk investments are ideal for those who want to invest for the long term and want moderate returns. Moderate risk investments typically consist of certain types of stocks, bonds, and mutual funds that pay heavily over the long term. Although generally riskier than saving money in a bank, for those looking to invest in the long run, historically, you will grow your money well. Moderate risk investments typically use the power of compound interest and the time needed to create a 10 to 40 year savings with regular savings. For example, saving $ 1,000 a year at a 10% interest rate for 30 years can yield close to $ 200,000. Moderate risk investments generally generate returns between 5% and 12%.

High Risk Investments

High risk investments are those that, if you are lucky, can get huge returns, but the slowdown is that they can be extremely volatile and in many cases instead to enrich you, you lose all or part of your investment. High risk investments include penny stocks, international stocks, certain types of Forex transactions, and so on. The sky is the limit of returns, but many high risk investments, if they are considered winners, should yield between 10% and 30% ++.

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Source by Connie Barker

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