Best retirement investments for every risk preference

28 Jul 2016
We all understand the importance of having investments and diversified portfolios. The hard part for us ‘average Joes’ is to understand the finer details of each of the investment options. Which are the safest investments? Which are those that will show the greatest return in the shortest time?


Which are perhaps a little more risky than others but show a greater return on investment? These are tricky questions and deciding which investments to go for is a little more complicated than that, because the best retirement investments actually depend largely on your personality, your experience in the past, your current situation and needs, and your risk preference. But, to help you narrow it down, here are what we think are the best retirement investments for every risk preference (but be sure to do extensive research of your own before you take the plunge):


• The risk-averse investment preferences

Unfortunately, for those of us who don’t like taking big risks, especially when it comes to money, the bad news is that there are no totally risk-free investments. Keep in mind that low-risk investments do sometimes mean low-returns, and inflation often impacts these investments by lessening the value of money tucked away. However, these investments do offer stability. For those who want to remain risk-averse, some of the best retirement investments will certainly be:


Savings accounts These accounts are not technically deemed investments per se, but by putting money in savings accounts for long periods of time you will see that money grow (albeit marginally) and you can rest assured that your money is safe in savings accounts.


Government bonds These are an example of less volatile investments that can be extremely low-risk.


Money market funds These accounts are similar to savings accounts but they see a higher interest rate for big sums of money deposited.


Certificates of deposits — These investments are also almost like a savings account, but the money is deposited for a fixed period of time and accrues a fixed interest rate.


best retirement investments for every risk preference


• For the medium risk preferences

Medium risk investments are great for those who are prepared to take a bit of a chance and are okay with moderate returns on investments over a very long time — perhaps not necessarily the best retirement investments if you need money soon. However, if you do have a bit of time this is a great option. Medium risk investors tend to have a diversified portfolio, and these are commonly the types of investments they go for:


Mutual funds According to this article, mutual funds “pool money from many investors to purchase a broad range of investments, such as stocks, bonds, cash, or other types of securities.”


Property — Still one of the best retirement investments around is undoubtedly property. The reason being that it’s a tangible investment. As we all know the property market is a fickle one, but generally speaking a good property in an area that is in high-demand will get you great returns in rent every month, and the hope is that the right property will go up in value over time.


Bonds This may seem confusing but bonds are technically ‘debt investments’. According to this article, “when you buy a bond, you loan money to an entity (a corporation or the government, for example) and they pay you back over a set period of time with a fixed interest rate.”



• For the high risk investment preferences

High risk investments can see huge returns on investment, but they are also very volatile, and while you can make a lot of money, you can also lose a lot of money with them. We highly suggest working with or consulting a financial advisor when it comes to these investments. For those who are looking for the best retirement investments in this risk category we suggest:


Stocks/Shares Deemed to be one of the riskier of the investments due to their volatile nature, stocks also tend to give the greatest returns. You buy shares of a company and the value of those shares increase or decrease with the value of the company. You may also get dividends from the profits made by the company.


best retirement investments for every risk preference


Gold — The idea with gold and collectibles is to hold on to them until you are happy with their worth and then to try and sell them for a profit.


FOREX trades — Very simply put, FOREX trades relate to the buying and selling of currency on the foreign exchange market.


We have only mentioned some of the more popular investment options here, there are still many more for you to explore: click here for a more in-depth look at different investments. Some people see the safer investments as the best retirement investments, while others prefer to try their hand (and sometimes luck) elsewhere. At the end of the day, your investment choices have to suit you.

Unless you are only putting money in savings accounts, when it comes to investing there will always be a little risk, so why not go for one of the more tried-and-tested, tangible options — property. Get in touch to take a look at our amazing villas in Calpe. With Britons purchasing a fifth of all Spanish property sold to foreigners according to this article, the proof is in the pudding: purchasing property in Spain is a great investment.

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