If you want higher returns on your business, including some potential for growth, you will need to search for the assets which give a comfortable balance of high return and with a low risk. Low risk means that there is a minimum chance of losing your principal but one which may be offset by a higher return than you will get from your investment which are completely risk-free.
In this article, we tell you the ways to get high returns with low risk and you can get even higher returns on some of these investments if you hold them. Not only that it will enable your investments to grow on a tax-deferred basis, but when the times comes to begin making withdrawals you can receive them on a tax-free basis.
There are many companies which pay dividend yields which are much higher than what you can get on completely risk-free investments. Dividend-paying stocks also have one major advantage over risk-free investments in that they enable you to participate in the capital gains.
Even though they may bounce some in the short run, the combination of dividend income and the capital gains can give an impressive long-term investment result. The dividend-paying stocks are not fully risk- free, but they lead to be far less risky than all other stocks.
The high dividends also give a strong measure of protection from price fluctuations at the time of bear markets. While the market may hammer growth stocks, the dividend stocks are less vulnerable to deep declines precisely due to the dividend.
The preferred stocks are the stocks with a preference ahead of common stocks. That means the preferred stocks have a higher claim on the company’s earnings and assets than common stockholders do.
The preferred stocks are practically a hybrid between common stocks and bonds. This is due to the preferred stocks have more predictable dividend income. For example, preferred stocks generally has a certain dividend level while common stocks dividends will only be paid upon the declaration by the board of directors which can also decide to either reduce or even eliminate the dividends of common stock.
Peer to peer lending:
The peer to peer lending method is commonly noted as p2p, which has been taking the investment world by storm over the past few years. This is widely the result of the financial meltdown a few years ago when the banks become a very hesitant to make personal loans, particularly to individuals and small business.
The net result has been coming to online leading platforms and securing loans for different purposes. But on the back end, those loans are being funded by the individual investors.
Borrowers end up the paying lower interest rates than they would at the banks whereas investors receive earning which are many times higher than what they can get in certificates of deposit or money market funds at those same banks.