Smart investing strategies for conservative investors in 2018

As we enter 2018, investors are reflecting on the investment decision they made in previous years. There are several considerations, especially with several unknowns based on national and geopolitical realignments that could have an adverse impact on investment portfolios.

In a long-term, low-risk investing season, here are some of the smart investing strategies for conservative investors in 2018.

1. US Savings Bonds

Smart Ultra-Safe Conservative US Treasury Bonds offer inflation-adjusted, fixed-rate savings bonds. As a government-backed investment, US Savings Bonds are offered at market rates and guaranteed against default and are therefore the perfect investment strategy for conservative investors.

2. High-yield savings accounts

This alternative savings product provides a secure and slightly higher return on cash over the medium term. Investing in high-yield savings gives the investor a fixed interest rate for returns at a very competitive market price.

3. Commodities

Commodities like precious metals offer a smart alternative to currency hedging as a hedge against inflation and other adverse economic uncertainties. Consequently, commodities such as agricultural products provide an excellent alternative for diversification and are therefore considered smart and conservative investment strategies for 2018.

4. Individual Notes

Corporate bonds are issued by companies as debt financing from investors to raise capital to meet the financial needs of the company. Corporate bonds are competitive, depending on the company and its financial position, and therefore have higher yields compared to treasury bonds.

However, investors should perform due diligence on the risk status of the respective company based on various financial analysis tools to determine risk and probability of default. Accordingly, it is good investment practice to invest in investment grade bonds rather than “junk” bonds. International Stock Funds

5. Individual actions

Investing in public companies for the long term offers the investor the opportunity to be a shareholder and raise capital in the company. Buying a company at the right share price offers the investor the opportunity to grow with the company. Consequently, individual shares not only generate returns on the share price, but also dividends on your capital.

However, there is still a possibility that the company will slow down due to internal or external forces affecting the market.

6. Fixed Unit Trusts

Fixed unit trusts are a mutual fund investment scheme that offers a fixed return based on units held in a given investment. Mutual funds are managed by investment trustees who divide the earnings from the investments. Investing in fixed unit trusts is a smart and conservative investment strategy because it guarantees annual returns.

7. Life Cycle or Target Date Funds

This is likewise a trustee-managed mutual fund for savvy conservative investors who want to guarantee access to their money after a set period. Consequently, the funds generate fixed returns for the investor. For example, a target date fund with a three-year maturity period might earn 5-7% interest, and this is what the investor will get for investing in it.

Despite being conservative and smart, all investment decisions should be made based on the risk profile of an individual portfolio.