Ways To Invest: How To Minimize The Risk Of My Investment Losing Value?

Ways to Invest: Low Risk Investments Options

Question: I am a working professional with about 6yrs experience. Normally, the money i earn goes into my Savings account, but since last year, i have been tempted to invest. However, the one thing that leaves me in a dilemma is where to invest, and what is the risk i should take? Rather, is there a slab of risk that is worth playing with, which will keep my returns high and save me more than what my bank gives? So, i would like to know How do I minimize the risk of my investment losing value?

Thank you!

Answer: As the saying goes- No Pain No Gain! In investment too, you need to take some amount of risk to earn decent to high returns. Although, you will earn returns even on low risk, the returns yielded on moderate to high risk will be better.  Before investing, understand the kind of money you have at your disposal, deduct your expenses and then you arrive at the sum that is available for investment.

While investing, you should be prudent in studying the various asset classes, understanding how the market has been performing, and also take into account = your age, career, family and so on. If the market is very volatile, or if you have been watching how there are too many changes in a company or industry, then you should avoid those stocks! Adopt a conservative approach to investing, don’t go overboard with investments.¬† Some pointers-

Invest In the Stock Market

Buy shares of a company that has been performing well and earning good profits. This means, they have a good record and your investment will at least be in safe hands.

Invest in Bonds

Unlike Stocks, Bonds are less volatile and give you a steady income. Go towards Government bonds or those from the insurance sector if you don’t want to take any risk at all

Go In For Short Term Investing

Instead of putting your money into a pocket that gets locked away for years together, you can look at smaller short duration based investing options. You can invest in Certificate  of deposit [CD]. This also provides a good mode of minimizing your risk.

So, make up your mind what your future goals are and the purpose of your investing and then take a call! Happy Investing!

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