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5 Low-Risk, High Return Investments

Investors often look to diversify their portfolios, yet want low-risk, high-return options to ensure they get the best value for their money. For this reason, many are now turning to non-traditional investment options. Some investors choose to put their money into a startup company and others turn to Broadway shows, offering financing in return for a share of the profits. When the time comes to select an roi investment, one that could bring in large amounts of cash, investors may also wish to consider a land investment or other offering. Following are five low-risk, high return options to consider.

Preferred stock combines the benefits of stocks and bonds, offering a dividend rate higher than what is typically seen with treasuries. There’s very little liquidity risk associated with this investment option, and investors may divest of their preferred stock at any time without fear of penalty. Investors may choose this option if they wish to have their investment graded by a credit rating agency.

Private mortgage investing offers another way to bring in strong returns. Often referred to as a hard-money loan, as the money is backed by an asset, private mortgages rely on investors as opposed to banks. Individuals turn to a loan broker to find this type of mortgage as a means of bridge financing. The borrower then refinances the loan with a traditional mortgage, and this process typically takes six months. What makes this such an attractive option is the low foreclosure rate, one that comes in at around three percent. Investors tend to make between 10 and 12 percent on these loans.

Brokered CDs tend to be the preferred choice of individuals who don’t want much risk associated with their portfolio. They are issued like bonds, but are FDIC insured, in the event they are held until maturity. They do carry the same risk seen with other bonds, and investors must pay taxes on them.

Secondary markets allow investors to put money into companies that have yet to go public. These private exchanges permit investors to get in on the ground floor and are typically sold by the founder of a company or an investor. Competition for these shares tends to be fierce, but the returns can be very high, thus this option shouldn’t be overlooked.

Utility stocks typically pay dividends around two to three percent and include voting rights. Share prices are often less stable than seen with preferred offerings, yet the prices aren’t impacted by changes in the economy. In addition, many stocks of this type are rated by a credit rating agency, providing the investor with more confidence.

Before making a land investment, individuals need to consider all options for their portfolio. These five offerings provider a high return on a person’s investment, yet carry little risk. Investors should look into these and other alternatives before putting money into any investment. Doing so allows the money to work for the investor instead of the investor working for it.