Low risk investment
What is a low risk investment?
Precisely what it says on the tin. An investment where there is perceived to be just a slight chance of losing some or all of your money. Low risk investments offer you a security blanket as they’re not likely to suddenly drop in value.
Where have you heard about low risk investments?
Savings accounts, cash ISAs, annuities, government bonds and protected funds are considered low risk investments. Cash is the most stable investment option, but the returns aren’t usually as high as fixed-interest securities.
What you need to know about low risk investments.
Risk comes with the territory when it comes to investing. The trick is figuring out where risk really lies. When you start investing, it’s usually a good idea to spread the risk by putting your money into a number of different products.
If you don’t feel confident about dabbling in the stock market but want a higher return than your savings account, gilts and bonds are good low risk options. Generally speaking, the prices of gilts and bonds tend to move more predictably than those of shares, and are less volatile. No investment is ever 100% safe though. The safer the investment, the lower the return is likely to be.