UPDATED: March 2022
The Typical Investment Risk of Different Assets – Each investment carries a different risk, determined with a thorough and proper risk assessment. However, it would help most investors make better investment decisions if they knew about the risks that each asset carried with it. Therefore, we will share the typical investment risk of different assets to paint the right picture. Here is the typical investment risk of various assets.
Table of Contents
1. Cash Equivalents and Cash
You should consider cash equivalents and cash to be the safest and best way to keep your money. Bank CDs, savings accounts, and money market accounts come with FDIC insurance and offer modest interest rates. Cash equivalents that carry the least amount of risk are U.S. Treasury Bills and money market funds. So, if you were looking for safe investments, they don’t come much safer than these investments.
2. Fixed Income Assets and Bonds
Investing in bonds is considered to be less risky than investing in fixed-income assets. Corporate and government bonds are fixed-income assets. You should know that when investing in bonds, there are different risk levels for each bond type. It would be best to look at the ratings from agencies such as Standard & Poor’s and Moody’s to find bonds you can ideally invest in.
3. Mutual Funds and ETFs
If you’re searching for diverse investments, they don’t come much better than mutual funds and ETFs. When you invest in these funds, you can purchase different bonds, stocks, and other assets through a single investment. However, these funds’ assets are riskier, which is why you should do your homework to find funds that are less risky to invest in.
4. Individual Stocks
The most common investments around today are stocks, and each stock carries risk. When you purchase stock in a company, you get a share of the ownership, and the price of the stock will go up and down depending on the company’s performance. The stock’s market performance will also reflect in its value. Some investors consider purchasing individual stocks risky because they are volatile, and their value fluctuates wildly.
5. Penny Stocks
Penny stocks are riskier than other investment types because their value fluctuates wildly depending on market conditions. Most investors consider penny stock investments a gamble instead of an investment because you can never be sure whether you will earn a profit or loss from this investment.
Conclusion of: The Typical Investment Risk of Different Assets
We have discussed some of the major assets that carry different investment risks. If you want to benefit from your investments, you must understand the risks that each asset class carries within itself to make wise investment decisions that help your financial future.
About the Author & How YOU Can Profit: This article is the copyrighted product of the team at BuybackAnalytics.com .
Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept: Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:
LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)
Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog. You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word. If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at firstname.lastname@example.org .