The investors who are very conservative work with this type of the investments which contains the high returns but the risk factor is very low compared to the return it provides so that the investments are safe and provides you the returns also.
There are many types of risk factors involved in the investments made by the people which will affect the returns of the investment heavily. The following are the types of risk market risk, interest rate risk, reinvestment risk, etc.
So now let us know which are the investments available where in the risk is low and the returns are high compared to the risk.
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This type of the stock is the one which is a hybrid security that trades in the stocks but there are the characteristics like bonds. The dividend rates of this kind of the stocks are usually higher by 1-2% then what the treasury bills and the bonds provide.
The preferred offerings are paid usually monthly or quarterly, they are very liquid and can be sold at any point of the time without any penalty.
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This is also the stock which will provide you the dividend as much as the preferred stock. These stocks are like the common stocks and these stocks provide you the voting rights as the common stocks.
The share price is not generally stable as the preferred stocks. These stocks are also often graded by the companies and the ratings are also provided by the agencies. This type of the stock is having the slight higher risk then the preferred stock so that we can say that they are less secured then the preferred one.
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The fixed annuities are designed so that the conservative investors can get the higher returns with the low risk factor so that the investors are attracted. The unique features of these kind of the stocks are that they will allow the investors to put the virtual amount without any limit i.e. you can keep the unlimited amount in this fund so that you can grow the amount as the tax-deferred until the retirement.
Peer to Peer Lending:
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This type of investment is growing rapidly and having a steady growth. Peer-to-peer lending takes place online and matches borrowers and investors in loans that benefit both thus we can tell it serves as the mediator. This type of lending does not use bank as an intermediary and has its own platform. The two major lending platforms in India are Lending club and Prosper. The only disadvantage here is it carries higher rate of interest than any other investments.
These are some of the areas, financeshed suggests, where you can invest and get higher returns by investing in low risk areas.