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Q: Guaranteed Investments -- No Risk or Low Risk ( Answered 5 out of 5 stars,   4 Comments )
Question  
Subject: Guaranteed Investments -- No Risk or Low Risk
Category: Business and Money > Finance
Asked by: nronronronro-ga
List Price: $30.00
Posted: 03 Jul 2004 13:58 PDT
Expires: 02 Aug 2004 13:58 PDT
Question ID: 369308
Hi There !

I am looking for "cannot lose" investments.  As such, I'm compiling a
list of securities guaranteed to either go up or break even assuming:

(1) the investment is held to maturity, and
(2) the issuer avoids bankruptcy

Here's what I've found so far:

Certificates of Deposit
Treasury Bills
Treasury Notes
Treasury Bonds
Treasury inflation-indexed Bonds
Corporate Bonds
Zero Coupon Bonds
Municipal Bonds
Guaranteed Investment Contracts
Fixed Annuities
Equity Index Annuities
Variable Annuities (if special "guarantee" rider is also purchased)
Municipal bonds
Collateralized loans
Preferreds (not all are guaranteed)
Whole life insurance (not all are guaranteed)


Clearly the risks of a U.S. government bond are quite different from a
collateralized loan to my cousin, Vinnie.  My list will obviously
include "guaranteed" investments other than government-issued
securities.

I am not trying to avoid all risk;  but I *am* trying to avoid market
risk (i.e., losing money at maturity due to market conditions).

A 5-star answer would be 3 additions to my list.  If you find more
than 3, then the researcher tip will go up on a pro rata basis.  As
Martha used to say, "Extra dough is a good thing..."


All comments greatly appreciated !

Thanks.
ron
Answer  
Subject: Re: Guaranteed Investments -- No Risk or Low Risk
Answered By: easterangel-ga on 04 Jul 2004 02:16 PDT
Rated:5 out of 5 stars
 
Hi! Thanks for the question.

Here are the other low-risk investment instruments you might want to
take a look at.


1. TIPS (Treasury Inflation Protected Securities) ? ?TIPS are like
other bonds in that they pay a fixed rate of interest. But unlike most
other bonds, the principal is adjusted twice annually to reflect
changes in the urban consumer price index. You then get the same
percentage return, but on an increasing principal amount.?

?Low-risk investments that maintain the gain?
http://moneycentral.msn.com/content/Investing/Simplestrategies/P38653.asp 
 

2. REIT (Real Estate Investment Trusts) ? ?Looking for a relatively
low-risk investment that generates dividend income and routinely
outperforms the S&P 500? Check out real estate investment trusts, or
REITs, a way to benefit from property ownership without becoming a
landlord.?

?Most REITs are commercial real estate trusts that sell shares in
portfolios of large-scale commercial properties. REITs typically
specialize in a particular property type: office buildings,
self-storage facilities, shopping malls, health care facilities,
hotels, apartment buildings. A small percentage of REITs, known as
mortgage REITs, engage in real estate financing, typically residential
mortgages.?

?Alternative investments in a volatile stock market?
http://www.bankrate.com/brm/news/investing/20020920a.asp 


3. MLP (Master Limited Partnerships) ? ?In a nutshell, these are
relatively safe investment vehicles -- usually in the energy sector --
that throw off 6% to 8% a year in the form of quarterly cash payments.
Often, those payments grow as much as 7% a year. And they do all this
in a way the lets you defer taxes, which is always a nice thing.?

?7 low-risk cash cows yielding 6%?
http://moneycentral.msn.com/content/P72085.asp


4. MBS (Mortgage Backed Securities) ? ?Mortgage Backed Securities are
an undiscovered gem. While these securities are primarily used to
provide safe income there is also the opportunity to get some capital
appreciation as interest rates fall. Another advantage to MBS is that
they are very suitable for most tax-deferred savings accounts.?

?Mortgage Backed Securities?
http://www.investopedia.com/university/20_investments/11.asp 


5. Savings Bonds ? ?US Savings Bonds are ideal for the low-risk
portion of your portfolio because of their safety, liquidity, and
inflation-protection features. They also have a high return compared
to other low-risk investments.?

?Why buy Savings Bonds??
http://www.savings-bonds-alert.com/why-buy-savings-bonds.html


6. Treasury STRIPS (Separate Trading of Registered Interest and
Principal of Securities) ? ?When a Treasury fixed-principal or
inflation-indexed note or bond is stripped, each interest payment and
the principal payment becomes a separate zero-coupon security. Each
component has its own identifying number and can be held or traded
separately.?

"Treasury STRIPS"
http://www.publicdebt.treas.gov/of/ofstrips.htm


7. Tax Liens -  ?In most jurisdictions, when a property owner is late
on paying real property taxes, the county or municipality will issue a
a tax lien on that person's property.?

?Individuals have been snapping up tax liens more and more because of
these two benefits. A fixed percentage rate, mandated by a government
agency, or the title to property at a substantial discount are
incredible benefits rarely seen with other real estate transactions.?

?Tax Liens and Real Estate?
http://www.savewealth.com/taxes/taxliens/ 
 

Search terms used:
?low risk? low-risk investments instruments

I hope these links would help you in your research. Before rating this
answer, please ask for a clarification if you have a question or if
you would need further information.
                 
Thanks for visiting us.                
                 
Regards,                 
Easterangel-ga                 
Google Answers Researcher
nronronronro-ga rated this answer:5 out of 5 stars
easterangel,

MBS, tax liens, and savings bonds are all great ideas!  Thanks.  

REITs and MLPs have market risk.  
Strips and TIPs are part of the U.S. government securities mentioned
in my question.


Thanks a million !
ron

Comments  
Subject: Re: Guaranteed Investments -- No Risk or Low Risk
From: voila-ga on 05 Jul 2004 06:28 PDT
 
Greetings Tripleron,

Something totally unrelated but as I think of you as Mr.
Unorthodoxman, I thought you might enjoy this link.  It's an auction
vacation type situation and if you know anyone turning 50 that 50% off
trip to France is quite the bargain.
http://www.luxurylink.com/Exclusives/Exclusive.phtml?id=50650
http://www.luxurylink.com/Home.phtml?rd=Virtual/Virtual.phtml?id=1640
http://www.luxurylink.com

Cheers from a fellow procrastinator/compost clothes piler, ;-)
* V *
Subject: Re: Guaranteed Investments -- No Risk or Low Risk
From: nronronronro-ga on 05 Jul 2004 22:15 PDT
 
My dear voila,

You are terrific !

ron
Subject: Re: Guaranteed Investments -- No Risk or Low Risk
From: voila-ga on 06 Jul 2004 12:55 PDT
 
I am, aren't I?  {full enamel jacket Jack Nicholson grin}
Subject: Re: Guaranteed Investments -- No Risk or Low Risk
From: nronronronro-ga on 06 Jul 2004 17:15 PDT
 
My favorite Jack Nicholson line was in Batman.

His girlfriend admires his suit and says, "You look fine."
He replies, "I didn't ask."

heh  heh  heh

Only Jack and you could get away with that kind of talk !
ron

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