3 Comments to “What type of investments are the least-risk and highest reward?”
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J - A said:
On July 22nd, 2008 at 11:24 pm
Government backed securities.
joeiselvis said:
On July 25th, 2008 at 9:53 pm
There are many different kinds of risk-inflation being one that is most often overlooked by investors. If the investment is for long term, your best chance for minimum risk would be to buy A class shares of an open end mutual fund investing in global value-purchased growth stocks. While there are some better funds in global real estate, the risk is a bit higher. Look for something with a low beta and a high alpha, (your investment advisor will help you with this), and a high Morningstar ranking of 4 or 5 stars. While I do not work for them, I have invested for clients recently in Franklin Templeton’s Mutual Discovery Fund, which looks strong for the near future, for a high return. Those clients were agressively oriented towards risk/return. There is always risk of loss, however, in any good investment. You can get guarantees in the market, but stand to lose actual purchase power of the investment due to inflation and taxes. And the entity with whom you loan your money, then takes it and invests in funds such as the one mentioned above. They, then make more on your money than you do. A short term investment will limit your options and you might want to go with something a bit safer, sacrificing total return.
John M said:
On July 28th, 2008 at 7:35 am
Although this is not a popular answer it is indeed the truth. Risk, is a function of reward. In the absence of one or the other, there “exists” arbitrage. Arbitrage is the name for risk free profit making. (Technically it is the simultaneous buying of one investment and selling it at an increased price somewhere else.) The best way for you to get the most for your investment is to diversify your portfolio. Next, you want to make sure that the securities you buy have a good value. Although people will argue that asset allocation is the best principal for your portfolio, if you start with securities that reasonably valued, you cant loose. Trying to gain return without risk will make you a speculator and not an investor.
On July 22nd, 2008 at 11:24 pm
Government backed securities.
On July 25th, 2008 at 9:53 pm
There are many different kinds of risk-inflation being one that is most often overlooked by investors. If the investment is for long term, your best chance for minimum risk would be to buy A class shares of an open end mutual fund investing in global value-purchased growth stocks. While there are some better funds in global real estate, the risk is a bit higher. Look for something with a low beta and a high alpha, (your investment advisor will help you with this), and a high Morningstar ranking of 4 or 5 stars. While I do not work for them, I have invested for clients recently in Franklin Templeton’s Mutual Discovery Fund, which looks strong for the near future, for a high return. Those clients were agressively oriented towards risk/return. There is always risk of loss, however, in any good investment. You can get guarantees in the market, but stand to lose actual purchase power of the investment due to inflation and taxes. And the entity with whom you loan your money, then takes it and invests in funds such as the one mentioned above. They, then make more on your money than you do. A short term investment will limit your options and you might want to go with something a bit safer, sacrificing total return.
On July 28th, 2008 at 7:35 am
Although this is not a popular answer it is indeed the truth. Risk, is a function of reward. In the absence of one or the other, there “exists” arbitrage. Arbitrage is the name for risk free profit making. (Technically it is the simultaneous buying of one investment and selling it at an increased price somewhere else.) The best way for you to get the most for your investment is to diversify your portfolio. Next, you want to make sure that the securities you buy have a good value. Although people will argue that asset allocation is the best principal for your portfolio, if you start with securities that reasonably valued, you cant loose. Trying to gain return without risk will make you a speculator and not an investor.