While most investors will stay away from day trading or trying to find a short-term investment that booms in a very short time, many still want a good yield on a safe investment. Usually, you’ll hear that risk is proportional to reward in that the more risk you take, the more reward you get. Now the important thing to keep in mind is that there is no such thing as a risk-free investment because whether you’re talking about market changes, inflationary risks, or even political-related risks, any one of those things could affect an investment. But there are a few investments that will usually bring in pretty good returns while not putting your portfolio in jeopardy.

Preferred Stock Investments

Not all stocks are the same, and generally, they’re classified as either preferred or common stocks, though there are even more categories within these. The advantage of owning preferred stock is that you can own a piece of a company if you want to do so without being heavily involved in it. You also have priority for dividend payments if the company is doing well and makes them, and you also could still recover your principal investment if the company has to liquidate its assets, although bondholders still have the top priority in this. The disadvantage is that preferred stocks can be more influenced by the Fed’s interest rate movement, but they still tend to have higher returns than most bonds.

Established Bond Fund Investments

The bond market can be a little trickier than the stock market, and one of the risks that come with it is liquidity, or being able to sell bonds when you need to. With bond funds, which are mutual funds that have a variety of bonds in their portfolio from corporate bonds to municipal bonds, there’s a chance you may have higher yields than most “safe” bonds while still having about the same level of risk. This is because some of these mutual funds in the bond market are made up of high-yield below investment grade bonds, but they’re also balanced out by investment-grade corporate bonds or low-risk government bonds. The bottom line is you don’t have to relegate your investments to US Treasury bonds to have low risk in the bond market.

REIT Investments Or ETFs Based In REITs

A real estate investment trust (REIT) can be a good asset to add to your portfolio that doesn’t require as much hands-on work with real estate. If buying individual REIT shares is too much for you, you can invest in them through an exchange-traded fund (ETF). Now compared to the stock and bond market, there can be a little more risk to REITs, and events like what happened in 2008 are reasons you shouldn’t put too many eggs in this basket. But they can have huge rewards such as being required by law to pay out 90℅ of their income in dividends. Also, they can be a hedge at times against inflation, and they can perform well when the Fed’s interest rates are low without the volatility of stocks. If stocks, bonds, mutual funds or other ETFs aren’t looking too attractive at the moment for you, a REIT may provide a great alternative.

This article was originally published on YoussefKabbaj.com