Top 5 Low-Risk Investments That Yields Great Returns

Some investors are quite skeptical with new investment opportunities presented to them. It is normal and necessary to be careful on where to invest resources especially that all investment platforms involve risks that may be inevitable. 

Fortunately, there are investment options that can grow profit without having to be bothered so much by the risks of losing money. Here are five low-risk investments that  canyield great returns.

Utility Stocks

Utility stocks are a kind of stock that involves the delivery of basic essential products to customers such as clean water, electricity, natural gas, and sewage services. Because of the steady consumption rate of these amenities, many businessmen are becoming highly inclined to invest in these resources. What investors like about this sector is its resilience to economic recessions and its ability to provide stable revenue.

These stocks feature an ability to be sold anytime without incurring penalties and can be conveniently , safely, and instantly,  traded. However, utility securities usually bear marginally greater equity risk compared to preferred stocks and are often taxable on both dividend payments and interest income.

Forex Trading

The Forex trading market is considered the biggest market in the world that provides decentralized trading of various currencies which plays a crucial role in money exchange rates. Currency trading involves buying currencies which the traders think will increase in value over time more than what they already sold. This transaction is highly liquid and offers broad opportunities that may not be provided in other investment forms.

Forex trading activities are continuous; It operates 5 days a week for 24 hours a day. A trader can increase his profits by using stop loss methods and other strategies which can be easily learned through different resources such as ebooks, online courses, and forums. There are also investment platforms that offer demo accounts where interested people can train themselves to trade forex before jumping in the waters.

Preferred Stocks

Preferred stock is a unique classification of stock that offers a fixed dividend schedule without the right to vote. Preferred stock blends elements of both bonds and common stock in a single place, along with monthly profits and control of the business. Individuals purchase preferred shares to raise their dividends and even gain some tax incentives.

It is also sometimes defined as a hybrid security that involves both bond and common stock characteristics. It incorporates the predictable and regular dividend distributions of the securities that come with equity investment benefits of the common stock, particularly the ability to raise the value of the assets over a period of time. 

Contract For Difference (CFDs)

In CFD dealing, an individual does not have to purchase or sell the underlying or physical asset.  He or she purchases or sells a range of components for a specific item, assuming the probability that the prices will increase or decrease over time. 

CFDs are a leveraged commodity, which implies that the trader has to invest a minimal portion of the total amount of the exchange to free up a spot. This method is termed margin trading.  Although this margin requirement helps investors to maximize their gains, their losses will also be accentuated as they are dependent on the CFD position’s maximum valuation.

Unit Investment Trust

Income funds participate in a broad variety of revenue-producing investments, such as mortgages, bonds, stocks, and secured loans. The assortment and specialized supervision they provide decrease the valuation and new investment hazards which are usually featured in independent shares.

UITs invest in stocks and bonds as well. Stock trusts are typically structured to have investment returns and/or profit revenue. They typically offer as many shares as required for a given time frame until their main contract period expires. Bond trusts sell a fixed quantity of items and, after all assets are produced to buyers, the main offering duration of the contract is terminated. Bond trusts shall pay recurring interest, always in reasonably predictable sums, before the primary bond in the trust matures. If this happens, the recovery assets are allocated to the customers by a pro-rated refund of the principal.