Which investment type typically carries the least risk?

No matter what product you select, investing, always carries with it some risk of losing or diminishing your investment. Even savings accounts at your favorite bank come with a level of uncertainty.

Investments are termed “safe” when the financial product offers relatively consistent returns with comparatively little risk. No investment is absolutely “safe.” No matter what product you select, investing, always carries with it some risk of losing or diminishing your investment.

Another reason to consider lower return investments is that you run minimal risk of losing your principle. If you’re new to investing or have limited funds, losing your principal can damage your confidence and limit your ability to continue investing. Many new investors start with a fixed sum and rely on the returns to build a portfolio.

Some of the best investments in 2021 strategies are based on long term, low-risk products. Although these products offer a low return, there is little to no risk of losing your principal. Low return, safe investments can also be more appealing if you are creating a strategy to save for your retirement.