Career & Money,  Living

Risky Vs. Safe Investments

One of the quickest ways to grow your money is to do some investments, but it is also one of the fastest way to lose it all.

However, just like everything else in the world, there are always two parts to it – in this case, there are safe and risky investments.

Risky investments are basically investments with a higher risk of losing your money. Safe investments are investments with very low risks, but also low returns. Obvious explanations aside, there is actually more to that.

Risky Investments

To go into details, risky investments are deemed ‘risky’ because there’s a higher risk of losing money in the investment. Nonetheless, if there are gains, they would usually be better returns. In regards to those who are suited to invest in high-risk investments, it all boils down to perception – some see the fear of losing money as an acceptable undertaking for the chances of higher gains. Examples of risky investments include:

(i) Stock Market Investment: 

Although there are good and bad things about investing in stock markets, the fact that the industry is a roller coaster ride makes it subsequently a high risk. A pro tip would be for potential investors to opt for blue chip stocks as they are stocks with a positive record of paying dividends.

(ii) Gold: 

Many believe that investing in gold metal is a solid plan; but that is only if the price and time is right. Truth is, the price of gold will nonchalantly fall over time. In fact, according to The Telegraph, gold finished as one of the worst-performing asset classes in 2013. Noted as its sharpest fall in 30 years, gold was down almost 28pc at about $1,200 (£725) an ounce. Proving that gold is indeed a risky investment.

Safe Investments

For safe investments, returns are pretty much guaranteed. In addition to that, your investments would be “safer” when you get a financial education, actively invest your money in investments you understand, receive majority of the returns, and become your own financial advisor. To put into perspective, low-risk investments include:

(i) Fixed Deposit:

If you have an undying fear of losing your savings, opening up fixed deposits in banks are one of the safest bets. It’s safe, backed by the government, works in a way that’s easy to understand and carries little risk. The drawbacks include annual bank fees, and that returns would generally be not that attractive.

(ii) Investment-linked Insurance Plans:

While there are those who might not see this as a safe investment, it can’t be denied that the pros outweigh the cons. Generally speaking, an individual would be killing two birds with one stone with investment-linked insurance plans – you secure your funds while having an insurance plan under your name.

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This article is brought to you by Etiqa, the Insurance & Takaful arm of Maybank Group

For more information on Etiqa’s wide range of investment-linked insurance plans, please call 1300 13 8888 or refer to their website.

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