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Senior Retirement Tips :: High Yield Safe Investments
High Yield Safe Investments: Looking for Safe Investments that Produce High Yield Results
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High yield safe investments are rare and often too good to be true, but analysts are recommending savvy retirement investors start looking into bonds.
High yield safe investments are rare and often too good to be true, but analysts are recommending savvy retirement investors start looking into bonds.
According to market reports and analysts like Kiplinger, high quality corporate bonds are being offered at a bargain and are a great way to make a fair amount of money with a minimal amount of risk.
Low Risk, Low Returns
Guaranteed investments like T-bills, bank certificates, Treasuries and money market funds have a very minimal amount of risk.
However, as a result, they offer very low returns and aren’t always the wisest retirement investment option, particularly if you want to be aggressive with your investments.
On the other hand, stocks are very risky (especially right now) and their volatile prices may offer high yields, but they’re certainly not a high yield safe investment. So, what is?
The High Yield Safe Investment
First of all, the high yield safe investment doesn’t exist. It’s a golden goose and a case of the too good to be true. However, you know what does exist? The moderate yield safe investment and these are high-quality bonds.
The Benefit of Bonds for 2009
Bonds were at an all-time low in November and December, their prices recessed by dropping stock prices. But, things are on their way back up meaning there’s potential for some great yields.
In fact, according to Kiplinger, investment-grade, high-quality corporate bonds could bring returns of more than 10% this year.
Ten percent is a significant return, particularly if you’re starting to get aggressive with either your retirement investments or your retirement savings’ surplus.
Bonds for Retirement
Kiplinger recommends that people nearing retirement should have about 40 to 50 percent of their retirement savings in bonds. Why? Because bonds won’t bounce around like stocks, they’re not as volatile plus they’re offering some great returns.
For the next year or so, bonds are the new high yield safe investments – the golden goose of the investment world.
Low Bond Prices
So, why are bonds priced so low? Their prices have been beaten down not only by the recent downturn in the stock market, but also by the credit crunch and our overall concerns about the economy.
In fact, the difference in yields between most bonds and Treasuries is higher than it’s been since the 1930s.
If you want to invest in bonds for your retirement, look into short and intermediate-term bonds. If you’re nearing age 65, you don’t want to be sitting around waiting for a 20-year corporate bond to mature.
If you’re investing in a taxable account, analysts like Kiplinger recommend the Vanguard Intermediate-Term Tax Exempt bond as one of the best high-yield safe investments.
It’s currently offering yields of 4% and is a very safe investment, particularly for those nearing retirement.
Remember though, there’s no such thing as high yield safe investments. If a bond offers a high yield that seems too good to be true, it probably is. So, minimize your risk and opt for a moderate risk for moderately high returns.
According to market reports and analysts like Kiplinger, high quality corporate bonds are being offered at a bargain and are a great way to make a fair amount of money with a minimal amount of risk.
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SeniorRetireTips.com :: High Yield Safe Investments