More about bond and cash investments

Looking to start a low risk investment and can't decide what to invest in? Here are some quick and essential facts about bond and cash investments.

08:35 06 September 2013

New investors on the market always look to start with big winnings, but these normally require big investments, which are always risky. Cash and bonds on the other hand may not return such big profits, but are significantly less risky. So here is what you need to know about cash and bonds before starting your investments:

Cash investments:

• cash investments are generally very safe, low risk investments;

 

• this means that they will not generate huge profits, but will instead not likely fall during this whole process;

 

• The most important thing with cash investments is the inflation rate. This is the only risk factor involved in this process;

 

• Cash investments are arguably the most liquid form of investments. This means that they are very accessible and can be done directly through banks;

Bond investments:

• the have a higher risk than cash investments, but still lower than most other investments;

 

• there are many bonds you may opt for, depending on which financial institution or corporation you want to grant a loan to;

 

• The highest risk factor with bond investments is the interest rate. Depending on the variations of interest rates, you may either end up winning or losing money.

 

• Bonds can be either sold or left to mature – in which case the initial investments are fully repaid by the company or financial institution to which you granted it.

Don't forget that you can always use a financial advisor to help you with your investments decision before actually making them. Some advisors out there work on commission, which means that they will have a huge interest in putting their experience to work for your investments.