There is no such animal. All investment carries risk - the lowest risk you will find is a certificate of deposit since the funds in many CDs are guaranteed by the FDIC - however, you will also find that these investments carry very low returns (this is called the risk-reward trade off). Once you move out of federally-guaranteed investments, you begin to see increased rewards since the risk of losing money begins to go up. Once you hit items like mutual funds, your reward becomes relatively significant - for example, you could see an average of an 8% annual return in a stock mutual fund - the problem is, however, that the return is not guaranteed and during some years, you could actually lose money. Because of the volatility of stocks, an investor looking to make that 8% annual return should have a 20 year horizon, not a 3 - 4 year horizon. If you project to need your investment money in 3 - 4 years, you would want a more conservative investment - one that is going to return down around 2 - 4% annually, but is less volatile and more secure - possibly a TIP fund (these are Federally backed securities. Over the past 5 years, for example, Schwab's TIP fund has average a 2% return - note however, that between 2011 and 2013, the fund went from $51/share to $59 and then dropped to $52 earlier this year and is now back to $56 - had you bought at the high and sold at the low, you would have lost money - even on a guaranteed fund (the government guarantees the bonds will be paid, not that the investor won't lose money).
If it's safety you're after, invest in Banks.
Most of the major banks may also offer some form of investment reimbursement scheme. In simple terms that my grandson Jake could understand, it means that once the profit on each individual share unit accumulates to the equivalent price of another unit, you then get awarded a free unit.
Banks are safe and offer a very stable growth. But don't expect to become rich night, unless you are like me and both parents were killed in an African Safari tour back in 1958 when a rhinoceros flipped the jeep over, and inherited the family wealth a age 19, but that's another story.
You need Market Linked Certified Deposit. They give you stock market return (excluding dividend) but also keep your principle.
i have no clue where to start , but i want to know and start investing. any ideas where to start or what to look for?
