When people say financial markets are like a rollercoaster, an experienced investor may raise a glass to it. One real-time example of this trope is the shutting down of economies during Covid-19 and the resulting plunge in stocks.
However, this is not the first and will not be the last market dip the world will face. So, this is an excellent time to explore different ways to invest in other safe options to get your savings plans in check. Discussed here are some of the safest ways to invest your money amid global changes.
High-Yielding Savings Account
High-yield savings accounts are FDIC (Federal Deposit Insurance Corporation) insured bank accounts and are one of the safest ways to invest your money, especially in the midst of global changes. These savings accounts are immune to market fluctuations and are highly liquid.
The interest rates are usually low for deposit accounts, and they will remain the same for the foreseeable future. But, you can still earn modest returns with the savings accounts, even if they don’t keep up with the inflation.
Preferred Stocks
Though there are numerous different ways to invest in markets, stocks remain an all-time favorite for many. Preferred stocks possess the features of both bonds and stocks, and they are perceived as hybrid securities. In light of the guaranteed dividend payments, preferred stocks offer an income potential same as bonds, along with ownership stake and potential of common stock.
These are considered safe investments because preferred stocks dividends are guaranteed in almost all cases. It means that no matter the condition of the stock, you will be getting a constant flow of income.
Corporate Bonds
If you are looking for higher and safer yields, then you must consider corporate bonds. Before investing, review the rating on the bonds. Look at the corporate bonds rated as investment grade, which means a rating of BBB, A, AA, or AAA.
Purchase the bonds from bond ETFs and mutual funds to reduce risk and to dodge hefty fees. Look for bond mutual funds which invest in a large number of company bonds. Most index-based mutual funds and ETFs are available without any trading fees, but make sure to cross-check and look out for load charges on mutual funds.
Certificates Of Deposits
If you do not need immediate cash but would like to earn a little extra than a savings account, certificates of deposits are the right choice. Among the different ways to invest money, CDs are the type of investments that offer a fixed rate of interest for a predetermined period.
Certificates of Deposits also have the benefits of FDIC’s guarantee of up to $250,000 per account. This guarantee can reassure you during uncertain times, especially amid global changes. If you can afford a solid initial investment, you can invest in high-yielding CDs that offer higher rates than the standard ones.
No matter the rise or fall of rates, with CD, you can take advantage of the regular investments to acquire good yields.
Target-Date Funds
Target-date funds, also referred to as lifecycle funds are for investors looking for a safe and retirement-type investing option. Select the year you want to access the money, and your investments will go from risky to conservative as the withdrawal or retirement date nears.
If you are open to holding the lifecycle funds until maturity, it will be an excellent option to ride out the market volatility during global changes. As most of these funds have longer maturities, there are high chances of recovering current losses in due course.
Last but not least, however dire the situation may be, don’t stop diversifying your portfolio and always remember to go gradual. Remember that there is no such thing as 100% risk-free investment. Consider your personal needs and create a portfolio that will offer stability during global changes.
