As countries and companies struggle to maintain economic stability and profits, many people are lost on where to invest money. There is no standard definition of a good investment. However, many people would agree that a sound investment is one that has small chance of losing money. Any investment with a good probability of making money and little chance of losing it is ideal for investors keen on knowing where to invest money. Several investment tools such as bonds, stocks and real estate can be safe locations for where to invest your money in 2013. They also provide opportunities to increase in value over time. However, one of the tips on how to make money includes suppressing the get-rich-quick desire and evaluating the benefits of the moneymaking options.
One of the answers to the question of where to invest your money in 2013 is real estate. This has been considered a safe place for investing money. Due to the economic turmoil, property values have been lower than in any other period. Investors can purchase valuable piece of real estate at a lower price than when the market recovers. Investors with money and patience to hold property until the housing market recovers should consider buying property priced below the usual market value.
This remains a safe place to invest money. People with the most basic knowledge on how to make money will agree that precious metals are a relatively safe means of investment despite economic woes and stock market values. Precious metals are rare and are coveted by many. Gold and silver are the most common options for many investors. However, other metals such as platinum, palladium and rhodium can also yield worthy returns.
The Stock Market
Securities market indexes remain a profitable investment tool for many investors. They yield higher returns than other forms of investments. Considering that historical data on securities market indexes evaluate the market as a whole and not individual stock, mutual fund or security, investing in the securities market is a safer option. No matter how much the market is affected by economic turmoil, it always bounces back. Billions of stock options are traded every day. This is proof of public confidence in the sector.
This provides a safe haven for investors’ accumulated cash reserves. The investment has a low probability of being affected by declines in the securities market. Money markets are ideal places for investing money for a short period. However, they have smaller interest rates, which lower investors’ purchasing power if the money is held for many years due to inflation and price increases.
These are provided by the federal government and considered the most safe investment tools available. The interest on treasury bonds is normally paid without fail. However, they have lengthy maturity duration and low interest rates. They are backed by the federal government and there has never been an instance where matured bond was never paid.
One of the safest investment bonds is grade bond issued by governments and corporations. They are issued to borrow money from the public. Most grade bonds pay a guaranteed rate of return until they mature. The maturity period varies from a few weeks to years. Grade bonds are traded much like stocks and have different prices. The greatest risk to investors is changes in interest rates. When interest rises, the bond price falls and the opposite happens when interest rates fall. Another risk associated with bonds is they are redeemed for their face value at maturity. This is known as credit risk. Credit risk is mostly associated with corporate bonds.
Ratings services rate bonds. Investors can maximize safety by investing in government or blue chip corporate bonds. The safest bonds include treasury securities and municipal bonds. Government bonds usually come with certain tax advantages. However, they have lower interest rates than corporate bonds.
Bank CDs are an ideal option for those who want to know how to make money safely. The CDs can be bought from various banking institutions. At purchase, bank CDs are structured with maturity periods and interest rates that meet the needs of the investor. The CDs are FDIC insured, meaning investors are guaranteed to get their money back in the event the bank becomes insolvent.
Equity Indexed Annuities
This is a good place for investing retirement money. The account value for equity-indexed annuities will never decrease. However, it will increase proportionately with the securities market. When securities market value increases, annuity also increases but when the market value decreases, annuities remain unchanged. This investment tool allows investors to benefit from stock market gains while being cushioned against losses.