Never Fear: Low-Risk Investments Are Here

Investing is tricky business. Whether you've been a part of the investment world for some time now or are just getting started, there's a lot to know and with the market fluctuating daily, taking part can sometimes seem like a gamble. However, these moments of exposure can mean large 'winnings'. We are going to let you in on a few must-know bits of information, minus all the sugar coating you are likely to hear from others. When you know both the good and the bad, it's much easier to make an educated decision, one that you won't later regret. We know how hard you work for the money you earn. If you are new to investing, penny stocks, CDs and savings bonds are worth looking into.

Start Small and Experiment: Penny Stocks

The reason so many people, especially first-time investors are so drawn to penny stocks is because of their affordability. Choosing to place a few dollars into a particular stock allows you to play around with the system and practice when to sell versus when to stick around. A loss in a penny stock is barely noticeable when compared to other forms of investing, as long as you play them right. When you have your money diversified in a wide range of stocks, you can keep close tabs on certain companies and get a feel for which you'd like to continue investing in and which ones may not be worth your time.

 Penny stocks are known for as much as tripling in very short periods of time which attracts many newcomers to the investor world. Playing the waiting game is difficult; especially when you are new to the whole process so seeing those instant results is very rewarding. Penny stocks allow you to get on board at affordable prices before a company makes it big. There are probably millions of people kicking themselves for not taking part in penny stocks to now exploding companies such as Starbucks and Microsoft. Sometimes taking a chance is worth it, especially when the amount of money on the line is less than what you spend on a coffee each day before work.

Tuck Your Money Away and Receive Interest

Certificates of Deposit are a fantastic investment. Have a bit of spare cash today that you wouldn't mind not touching for a few years? Placing it in a CD allows you to accrue interest for the life of the CD. Once that CD matures, you will receive every penny of your money back, plus the interest. Since interest rates are known to fluctuate, it's nice to have a solution that isn't affected. No matter what happens, your interest rate will remain the same for the life of your certificate. For those of you who aren't so sure about your financial futures, you'll be happy to hear that CDs allow you to remove your money early for a penalty. When selecting a CD, make sure it is FDIC insured and shop around to get the best interest rate possible. Interest rates may be low today but extending the life of your CD is another way to get more money in your pocket.

Long-Term Savings with a Little Help from Bonds

If you're looking for a long-term investment strategy then savings bonds may be right up your ally. Selecting a Series EE bond allows you to receive double your investment if you allow the bond to reach full maturity. 20 years may seem like a long time but if you are able to put a decent amount of money away today and forget about it, you'll be able to retire quite nicely. The reason we chose not to discuss a Series I bond today is because they aren't as set in stone. There are two parts to this type of bond: a fixed interest rate and adjustable inflation return. While the fixed aspect will never change, the adjustable portion can, so it's definitely something to speak with your financial advisor about before making the plunge.

Nothing is Guaranteed

It may go without saying for some but we think it bears repeating. When investing your hard-earned money, never put more away than you are willing to lose. This way, if the unexpected happens, you aren't left scrambling to come up with money to stay afloat. Treat your investments with much thought and care and in time you are bound to make some positive progress.

 We advise focusing on ways that your money is safe and where you will receive a high return first and then if you feel up to it, allow yourself to branch out into pricier stocks and other forms of investment. Speak closely with a professional at all times and keep yourself educated on the stability of the market and interest rates. Even if you have others watching out for you, it never hurts to do some of the heavy lifting because it is your money on the line, after all – not theirs.

The author of this post, Nancy Baker, is a freelance blogger who is currently writing for Money Saving Angels, leading financial advisors. A bibliophile, Nancy is a huge fan of Mario Puzo. Read more about Money Saving Angels and you can also follow her on Twitter @Nancy Baker.

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