Managing your Risk!
Call Dr. Pyrich at 407-555-2906
Levels of Risk
Low Risk Investments
- Certificates of Deposit - cannot access until maturity, but a higher percent interest is paid over longer periods of investment.
- Municipal bonds - paid at a fixed rate, this rate doesn't change throughout the life of the bond. Money is paid back at maturity
- Money Market Mutual Funds - a safe haven to preserve money, but it doesn't keep up with inflation.
- Treasury Bills - short-term, with maturity in one year or less
Medium Risk Investments
- Bonds - typically of medium risk with good yield.
- 401(k) plans - retirement plans arranged by your employer.
- Treasury Notes and Bonds - long-term bonds, with maturity in more than ten years
High Risk Investments
- Corporate Bonds - offers higher yield compared to other investments.
- Junk Bonds - a type of bond with high yield
- Stocks - typically risky, but high yield.
- 401(k) plan - check with your employer to see if a 401(k) plan is offered. You can start investing without even thinking about it, it will be docked from your paycheck. Your paycheck won't be much less, because sometimes investments are tax deductible.
- Bonds - generally low-risk investments that will help steadily grow your wealth.
- Stocks - early on in investment, have a larger percentage of stocks. When your investment is about over, have a lesser percentage of stocks.
- Bonds - early on in investment, have a lesser percentage of bonds. When your investment is about over, have a larger percentage of bonds.
If you want to keep yourself from pulling money out of your account, invest in these to help yourself wait. The following investments either restrict you from accessing it until maturity or do not require much action on your part.
- Certificates of Deposits - cannot access until maturity
- Corporate Bonds - also cannot access it until maturity
- 401(k) - handled by your employer through taking money out of your paycheck, close to nothing on your part.
- Money Market Mutual Funds - you can keep money here for a while.
- Treasury Bills - maturity in less than a year.
- Treasury Notes and Bonds - maturity in more than ten years
Equities are also good forms of investment, such as houses and cars, that retain value over time. The value of cars depreciate after you drive off the lot, especially new cars. However, they still retain a good amount of their value over time. Houses can depreciate and appreciate over time, depending on the market.