Safest Money Investments
- Gold is typically considered a safe money investment.gold bangle / gold bracelet image by Sid Viswakumar from Fotolia.com
Safe money investments is terminology used to describe investments in products that are low risk and more easily convertible to cash. During uncertainty or downturns in the economy, conservative investors turn to so-called "safe money investments" as a way to preserve cash while finding low-risk ways to make profits. - Bonds, treasuries and other such debt instruments are often considered among the safest of safe money investments. Government bond programs and Treasury bills are considered among the safest investments for protecting your wealth since the government itself often buys treasuries. Traditional savings bonds have very modest returns as of 2010, but they offer a way to preserve cash while making more than a typical savings account generates.
- Investor Guide states, "As their name implies, cash investments are easily redeemable with small, if any, penalties for withdrawal." Savings accounts, money market funds, and certificates of deposit are among the simplest and safest forms of cash investments. These products can usually be purchased through your local bank branch. Savings accounts and money market funds have low returns (often less than 1 percent) as of 2010, due to the Federal Reserve's low interest rate policy. Certificates of deposit offer a slightly higher return, though your money is tied up for a specified period.
- Equities markets usually decline in down economies as investors flee higher-risk stocks and growth investments. However, blue chip stocks and stable companies offer solid long-term investment opportunities. The Motley Fool pointed out in a 2003 Safe Short-Term Investments Guide that "on average, stocks have returned about 11% per year over the last 50 years, while cash accounts and bonds have averaged up to about 6%."
- Gold is sometimes called "the safe money investment." Gold speculation often runs counter to a weak dollar as buyers hedge against a struggling economy and weak currency with gold investments. While considered "safe," gold has offered one of the strongest annualized investment returns from 2000 to 2010. Gold traded at $255.30 per ounce at one point in 2010, and trades at $1,344.50 (just below new record levels), as of October 6, 2010.
