If you want high investment returns you need to take a risk but the amount of risk you take for the reward you get is important. Which are the best high return investments in relation to risk? Let's find out and the answer may surprise you.If you want high investment returns you need to take a risk but the amount of risk you take for the reward you get is important. Which are the best high return investments in relation to risk?
Let's find out and the answer may surprise you.
Let's look at a variety of different investment sectors the facts show that there are good investment managers in all sections but lets look at them for the purpose of our analysis as a broad sector
1. Mutual Funds
Are these a good high return investment? Were told they are but do the facts add up. No they don't. The overwhelming bulk of mutual funds cannot out perform the S & P Stock index and very few make double digit gains consistently.
Fact is, asset managers promote the ones that do well, then drop them when they don't and find another with short term performance that's good, then that's dropped.
The fact is they make their fees anyway and most people just take the sales hype and end up disappointed.
Their a poor high return investment and best you can expect is double about 10 – 15% and with downside swings of up to 30% so the risk reward is not great.
2. Leveraged funds
These can include futures options and currencies but the facts show that while there are some great performers most put in mediocre performance.
You can get managers in this sector that only make on performance and this is the way to go should you wish to be involved in this sector. Normally you risk you entire investment and the best upside is normally 20% and this is a minority.
3. Real Estate
Although not seen as a high return investment, it beats mutual funds as an investment hands down in terms of risk – reward.
Most people who are careful with location and who hold longer term normally get good solid returns and low risk. Pick the right location and rewards can be stunning.
4. Land
Not as well known as real estate, but its cheaper to buy and can produce gains of similar magnitude or even greater.
Howard Hughes was a big fan of this high return investment as are most of the world's richest families.
Land is a short supply their not making it anymore! and land bought in prime locations that gets developed produces spectacular gains.
Low risk investments can actually be high return investments
If you take the above 4 high return investments, it's a fact that land and real estate produce far bigger gains on average than mutual funds or leveraged managed funds and they also do so with low risk.
If you want a high return investment forget the hype and the minority of mutual funds and leveraged funds that make stunning gains most don't.
Hedge funds are a perfect example. Very few win. Their cloaked in secrecy, in offshore locations most of the time. So, you never know what's going on and when you find out it's too late.
High return and low risk
If you take real estate and land the way to turn these into high return investments is simply to pick the right location. If you do this you will have a high return investment with low risk.
Double your investment quickly with low risk!
There are many overseas locations in particular where you can buy easily, cheaply and have stunning potential rewards.
Costa Rica is a well known favourite of American and other foreign investors. Many savvy investors are making double or triple digit returns in just a few years with low risk.
It's a safe country, investing is easy, its tax efficient and your investment is liquid i.e it can be bought and sold quickly to bank profits.
If you have never thought of land and real estate as high return investments you should.
You can get high returns and low risk in the right locations and Costa Rica is a perfect example of a location that gives you low risk and high reward.
Take a closer look and you may be glad you did.
On how to make money by investing in land and real estate is available FREE which gives you all the facts so you can decide for yourself go here
By sacha tarkovsky
Friday, May 21, 2010
Safe Investments - How safe is your money?
Are you interested in preserving your principal? Here is a Safe Investment Guide to help. We review Treasuries, Government Agency Bonds, and Certificates of Deposit.After working hard to build a nest egg for retirement, you want to know that your investments provide a good return but remain safe. Although well managed stocks, mutual funds, and corporate bonds can provide superior returns, risk goes hand in hand with reward. Your principal and earnings are not guaranteed and can be dramatically affected by a down turn. As people near retirement, it makes sense to move investments into fixed income products such as Treasuries, Government Agency Bonds, or Certificates of Deposits.
Here is a safe investment guide with pros and cons for each product.
Treasury Bills, Notes, and Bonds
The only difference in the above is the length of the term. T-Bills are offered with a term length of 1-year or less. T-Notes are offered with a term length of 1-year to 10-years. Finally, T-Bonds are offered with term lengths greater than 10-years. We will collectively call these Treasuries. Treasuries are issued by the Federal Government and you are basically loaning them your funds for which they guarantee to pay you a certain interest rate. They are guaranteed by the 'full faith and credit' of the United States Government. You will always get your principal back at maturity. Treasuries can also be purchased in large denominations. Their safety and ease comes with a relatively low rate of return. They can also be bought and sold in the secondary market. Treasuries are a safe investment, but as with any of these fixed income investments, they do carry the risk that interest rates and/or inflation will rise during the term, thus eroding their spending power. Treasuries are exempt from state and local taxes.
Government Agency Bonds
Government Agency Bonds are issued by agencies of the Federal Government and with the exception of the GNMA (Ginnie Mae - Government National Mortgage Association) they are NOT backed by the 'full faith and credit' of the government. As far as safe investments go, GABs are considered next in safety to Treasuries and Certificates of Deposit. GABs carry a AAA rating, but because they aren't backed like Treasuries and there can be a prepayment or call risk, they offer superior rates to Treasuries. A prepayment risk comes into play if the underlying loans that the security is backed by, pay off early and thus decreases the life of your bond. GABs are usually offered with maturities from 2-years to 15-years, but have call periods where the principal can be returned to you without having to pay further interest. This is a call risk. In a falling rate cycle, your bond will most likely be called and your re-investment rate will be lower than what it was. Many people find themselves having to buy long-term bonds to try to maintain an attractive rate. In a rising rate cycle, your funds may go the life of the bond and miss out on higher rates. Many GABs are exempt from state and local taxes. Government Agency bonds can be purchased in large denominations and are considered a very safe investment.
Certificates of Deposit (CDs)
Banks and credit Unions offer Certificates of Deposit for terms usually from 90-Days to 5-years. As long as the CD is offered by an FDIC insured bank or NCUA insured credit union, your principal is guaranteed by the federal government up to $100,000 for a single account; $200,000 for a joint account; and $250,000 for an IRA. If you open a CD that compounds and open it for less then the interest you will earn, the principal and interest would be guaranteed up to the above amounts. Because, they carry no risk (as noted above), certificates of deposit are an attractive and very safe investment. The interest from CDs is fully taxable. Most CDs are fixed for the term you select, but there are banks that offer callable CDs and even CDs linked to different market indices. Certificates of deposit generally offer yields that are better than Treasuries and GABs, but you may want to do a tax analysis to see what the Tax Equivalent Yield is. You can open Certificates of Deposit at multiple institutions and receive $100,000 of FDIC insurance at each institution. Searching for multiple institutions can be time consuming. Deposit brokers can assist you and save you time with this search.
Chris Duncan is a NASD Registered Representative. He specializes in helping clients find the best and highest CD rates nationwide. His clients include individuals, financial institutions, corporations, and public agencies. Visit us at www.jumbocdinvestments.com or our Certificate of Deposit Rates page.
By Chris Duncan
Here is a safe investment guide with pros and cons for each product.
Treasury Bills, Notes, and Bonds
The only difference in the above is the length of the term. T-Bills are offered with a term length of 1-year or less. T-Notes are offered with a term length of 1-year to 10-years. Finally, T-Bonds are offered with term lengths greater than 10-years. We will collectively call these Treasuries. Treasuries are issued by the Federal Government and you are basically loaning them your funds for which they guarantee to pay you a certain interest rate. They are guaranteed by the 'full faith and credit' of the United States Government. You will always get your principal back at maturity. Treasuries can also be purchased in large denominations. Their safety and ease comes with a relatively low rate of return. They can also be bought and sold in the secondary market. Treasuries are a safe investment, but as with any of these fixed income investments, they do carry the risk that interest rates and/or inflation will rise during the term, thus eroding their spending power. Treasuries are exempt from state and local taxes.
Government Agency Bonds
Government Agency Bonds are issued by agencies of the Federal Government and with the exception of the GNMA (Ginnie Mae - Government National Mortgage Association) they are NOT backed by the 'full faith and credit' of the government. As far as safe investments go, GABs are considered next in safety to Treasuries and Certificates of Deposit. GABs carry a AAA rating, but because they aren't backed like Treasuries and there can be a prepayment or call risk, they offer superior rates to Treasuries. A prepayment risk comes into play if the underlying loans that the security is backed by, pay off early and thus decreases the life of your bond. GABs are usually offered with maturities from 2-years to 15-years, but have call periods where the principal can be returned to you without having to pay further interest. This is a call risk. In a falling rate cycle, your bond will most likely be called and your re-investment rate will be lower than what it was. Many people find themselves having to buy long-term bonds to try to maintain an attractive rate. In a rising rate cycle, your funds may go the life of the bond and miss out on higher rates. Many GABs are exempt from state and local taxes. Government Agency bonds can be purchased in large denominations and are considered a very safe investment.
Certificates of Deposit (CDs)
Banks and credit Unions offer Certificates of Deposit for terms usually from 90-Days to 5-years. As long as the CD is offered by an FDIC insured bank or NCUA insured credit union, your principal is guaranteed by the federal government up to $100,000 for a single account; $200,000 for a joint account; and $250,000 for an IRA. If you open a CD that compounds and open it for less then the interest you will earn, the principal and interest would be guaranteed up to the above amounts. Because, they carry no risk (as noted above), certificates of deposit are an attractive and very safe investment. The interest from CDs is fully taxable. Most CDs are fixed for the term you select, but there are banks that offer callable CDs and even CDs linked to different market indices. Certificates of deposit generally offer yields that are better than Treasuries and GABs, but you may want to do a tax analysis to see what the Tax Equivalent Yield is. You can open Certificates of Deposit at multiple institutions and receive $100,000 of FDIC insurance at each institution. Searching for multiple institutions can be time consuming. Deposit brokers can assist you and save you time with this search.
Chris Duncan is a NASD Registered Representative. He specializes in helping clients find the best and highest CD rates nationwide. His clients include individuals, financial institutions, corporations, and public agencies. Visit us at www.jumbocdinvestments.com or our Certificate of Deposit Rates page.
By Chris Duncan
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