facebookWhat are the best low-risk investment strategies for young people who are starting their careers? - Seedly

Anonymous

03 Nov 2020

Career

What are the best low-risk investment strategies for young people who are starting their careers?

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Depends what your definition of risk is.

I follow Warren Buffett and Charlie Munger’s definition; Risk is defined as the probability of making a loss. You can also search up the definition of risk of investment, most will agree.

Over the Long run good stock markets like the S&P500 always goes up because of the underlying fundamental companies, their strengths are economical moat across the globe.

With that, Long term investing in the stock market is extremely Low risk. What most people call risk, they usually refer to volatility. Yes stocks are much more volatile compared to other assets like bonds/ Gold.

But over the Long run the evidence is clear. Also, Volatility is not a scary thing. An intelligent investor loves volatility. It creates opportunities for you to get a sale/discount.

Other assets like bonds are an almost guaranteed lost of money for me as they barely give you returns to beat inflation unless you can trade in the bond market.​​​

Chan Ze Ming

02 Nov 2020

Accountancy and Finance Student at Nanyang Polytechnic

Hello,

If its the best low risks investment strategies, then it got to be investing in government bonds (Eg SSBs). Why? - Virtually no risk but yield more than savings accounts. Cons - Even tho more than savings accounts, it is very low.

If its low risks in terms of market returns, then investing in ETF/Roboadvisor will be a good one (Eg S&P 500). Why? - since you will be investing to track market returns, the market returns will be your returns. (Returns = 10%, your returns = 10%, same goes if its negative)

If its low risks in terms of stocks, then you are looking at defensive stocks such as reits. Theres many different types of reits so you have to check which reit suits you the best. They are obligated to pay out 90% of their income so that gives you a stable payout (tho right now, some might defer/decrease dividends)

If you mean low risks in terms of business stability, then youre looking at blue chips (eg banks in singapore and other large and stable companies). They basically come together to form the sti index so whenever theres a bad day, chances are their price will drop. Good thing is that their stable and gives dividends (tho right now, blue chips aint safe too, look at sph)

Hope this helps!

Zhi Wei Teo

02 Nov 2020

Blogger at Singapore

This depends on how you define low risk and if you want to DIY. If you are feeling uneasy when you a...

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