Methods to get attractive returns without taking too much risk
As the cost of living remains constantly on the rise, the idea of investments sounds good to make a good amount of money within a stipulated period of time.
However, given the condition of the economy, every investor wants to invest the hard-earned money in a way that it generates higher returns without involving too much risk.
Getting attractive returns without the involvement of too much risk might seem like a far-fetched idea but it can be made possible through the application of some simple strategies.
The following are a few of the possible methods for you to get high returns without fretting about the high risk factors.
1. Saving accounts with high interests
A saving account that provides high yields can be the answer you are looking for if you want a risk-free way of earning major interests on the money.
With such accounts, you will get to earn a minimum amount of interest for keeping the money as a deposit. You just need to open the account and deposit your money.
There is not much effort required in this case, almost like a Demat account. The best of such accounts will offer good interest rates but not charge any fees. Look for an account that has good customer service, ease of depositing and accessing money, and online accessibility.
2. The stocks that provide dividends
The stocks that pay dividends are not completely free of risks but undoubtedly the risk factor is much lower than usual.
This is because these are the companies that have better recognition in the market. Besides, you get to participate in getting capital gains and that adds to the dividend income that you will be earning.
In the short run, it might have a chance of bouncing but when you think in the long terms, the combination of capital gains and dividend earned can provide you with impressive results. During the times of bear markets, the high dividends also deliver a strong protective measure during the fluctuations of price in the market.
The market might cause the growth stocks to plummet, but the dividend stocks remain less vulnerable mainly because the dividends. Get complete knowledge about this before opening a Demat account.
3. The preferred stocks
The preferred stocks have most of the advantages of the bonds in the fact that they trade in a very limited range.
There is a regular payment of dividend and they remain high up in capital stack when you compare it with equity. Additionally, if the company gets forced for the reduction of dividends, it needs to kill that dividend to a common stock before preferred stock. It makes them a highly favored option for the part of an income portfolio.
Preferred stocks are just as the name suggests and they are the stocks that get a preference more than common stocks. Thus, with the preferred stocks, you have a high claim on the assets and earnings of the company as compared to common stockholders. The preferred stocks provide you with a more predictable way of earning the dividends.
4. The peer-to-peer method of lending
In the past couple of years, the peer-to-peer methods of lending have taken the world of investments by storm.
It resulted from the economic meltdown that resulted a few of the years ago, when the banks became a lot hesitant for making personal loans, particularly to small businesses and individuals. This method of investment has given a welcoming relief in terms of interest rate from the near to zero interest that existed since the last ten years.
The net result has seen people coming on to the online lending forums and getting loans for numerous purposes. On the other hand, the loans are sponsored by individual investors. The parties meet on the peer-to-peer sites, and they agree to figure out the loan terms. The process is seamless and streamlined and you end up getting more dividends than the risk factors involved.
5. Getting rewards for the credit card
If you are a frequent user of credit cards, you can use that pattern of spending to get an advantage.
There are numerous credit card reward programs that offer varying ranges of rewards for using that card. You will anyway use your credit card for numerous expenses and in the process you will also be making some good money through the rewards.
There is a low risk factor involved and you are earning money doing what you will anyway be doing. Besides, you are not putting in any capital to earn the rewards. It just comes as a result of the daily spending activities.
However, keep in mind that the rewards for the credit card will only be effective if you are a user who pays back the balance every month.