Every investor wants a high return on their investment and every wise investor knows that you need to know how to strike a balance between returns and risk tolerance. While you might have heard that most high return investments are high risk, it is still possible to get high gains without too much exposure. The secret is always a knowledge question. Here are tips that will help you get the best returns with low-risk investments.
Consider Dividend-Paying Stocks
It is possible to make the most out of dividend-paying stocks without overthinking about risks. Several companies offer a good interest on their dividends; it only depends on where you are looking. These stocks are not entirely risk-free, but they are less risky compared to mini-bonds and other high-risk investments you will find out there.
Also, you can participate in capital gains. When you combine the two, the combination is a good long-term investment strategy.
Enhance your Dividends Options with Preferred Stock
Preferred stocks from sub-sectors come with a lot of advantages with lower risks. Dividends from these stocks are paid regularly with tight ranges. Also, they appear higher on the options rank compared to equity. When a company is looking to reduce their dividends, it has to deal with all the current dividends to the common stock. This makes it quite ideal for long-term investments.
Preferred stocks, just as the name suggests, have more asset control over common stocks. In short, in case the company goes to receivership, this category is paid before other stakeholders, making it a more secure option. You can picture it as the balance between common stocks and bonds. They are more predictable in returns compared to common stocks with good yields though not as good as mini-bonds.
Other low-risk investment options you could look into are annuities and real estate trusts.