3 Safe Investment Avenues for Seniors Offering High Returns
Key Takeaways:
- Seniors can mitigate risk and pursue higher returns by diversifying their investment portfolio across safe options like large-cap mutual funds, hybrid funds, and alternative investments such as Sovereign Gold Bonds (SGBs) and Real Estate Investment Trusts (REITs).
- Balancing risk and reward through diversification is crucial for seniors aiming to achieve financial goals and preserve wealth in retirement, with conventional options like fixed deposits and senior citizens’ savings schemes offering additional avenues for attractive returns.
When it comes to investing, the potential returns are often directly linked to the level of risk involved. Typically, higher returns require higher risks. However, there are safe investment options available that offer the potential for attractive returns, making them particularly appealing to senior investors.
It’s essential to understand that the term “high return” is relative. A return of 10% may be considered low for someone with ambitious financial goals, while the same return can be seen as high for retirees aiming to beat inflation without taking excessive risks. In this article, we’ll focus on safe investment avenues that can provide seniors with higher returns to preserve and grow their wealth during retirement.
1. Safe Investment Options in Equities for High Returns
Traditionally, investing in equities is considered a high-risk venture. However, several strategies can help mitigate this risk, making it a viable option for seniors looking for higher returns. Diversification and systematic investment plans (SIPs) are two key approaches to consider.
- Large-Cap Mutual Funds and Index Funds: By investing through the SIP route in large-cap mutual funds and index funds, you can benefit from the potential growth of the stock market while spreading your risk across multiple companies.
- Arbitrage Funds: These funds offer an attractive return with relatively low risk. They capitalize on price differences in various markets, providing a safer investment avenue within the equity category.
Instead of allocating your entire corpus, consider investing a small portion (up to 10%) in equity instruments. This approach allows you to harness the growth potential of equities without exposing your entire portfolio to market volatility.
2. High-Return Options in Hybrid Funds
Hybrid funds strike a balance between debt and equity investments, maintaining a moderate risk-reward profile. Seniors can enjoy safer returns, even in volatile markets, by opting for these funds. While they carry slightly more risk than pure debt funds, they provide an appealing investment opportunity.
Considering the relative safety of hybrid funds, you may allocate a larger portion of your portfolio to them compared to equity-oriented mutual funds. This approach allows you to maximize potential returns without compromising on security.
3. Alternative Investment Options for Safe, High Returns
Seniors looking for alternative investment options can explore various instruments to diversify their portfolios. These options include:
- Sovereign Gold Bonds (SGBs): These government-backed bonds offer an opportunity to invest in gold without the need for physical storage. SGBs provide safety and the potential for capital appreciation.
- Real Estate Investment Trusts (REITs): Investing in REITs allows you to participate in the real estate market’s returns without directly owning properties. They offer regular income and the potential for capital gains.
- Fractional Ownership in Realty: This option enables you to invest in a fraction of a property, reducing the financial commitment while still benefiting from real estate returns.
When considering alternative investments, avoid overexposure to a single instrument to mitigate liquidity issues and lock-in requirements.
Key Considerations
Rather than putting all your resources into one investment avenue, diversify your portfolio across multiple options. This approach helps reduce risk and ensures a more balanced investment strategy. Additionally, you can explore conventional investment products like high-interest fixed deposits (FDs), high-yield savings accounts, senior citizens’ savings schemes (SCSS), and Public Provident Fund (PPF) to secure attractive returns on your capital.
In conclusion, seniors seeking higher returns can achieve their financial goals through a combination of safe investment avenues. Balancing risk and reward is essential, and diversification remains a key strategy for building and preserving wealth in retirement.
Contact Information:
Email: [email protected]
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Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.
Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.
Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.
Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.
Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.
With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.
Aaron can help you and your family to create, preserve and protect your legacy.
That’s making a difference.
Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.
