Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Picking Safe Investments for Retirement

27 views

Published on

http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement

Picking Safe Investments for Retirement

There is a difference between investments that are currently making money for you and investments that will be safe into your retirement years. A sad example of investors who did not exercise due diligence with their investments is the Bernie Madoff pyramid scheme. One hundred seventy-six individuals, banks, pension funds, and charities were invested with Madoff and happy to be getting a great return on their money. When the Madoff house of cards collapsed there were $65 billion in faked gains and investors lost about $18 billion of their investment capital. Picking safe investments for retirement is a skill separate from making money in stocks, real estate, and other investment vehicles. The fact of the matter is that when you are retired you will want to enjoy retirement and be spending all of your time watching your portfolio. How can you invest safely for retirement and not end up like Madoff’s clients?

Picking Safe Investments for Retirement: What Are Some Choices?
US Treasuries
Inflation Protected Treasuries
AAA Corporate Bonds
Dividend Stocks
Real Estate Investment Trusts
ETFs
Picking Safe Investments for Retirement: US Treasures, Inflation Protected
In our article about how to invest without losing any money, we mentioned US Treasuries.

US Treasury bills have maturities of a year or less. US Treasury notes have maturities from two to ten years. And, US Treasury bonds have maturities of ten to 30 years. Each of these investment vehicles is backed by the “full faith and credit” of the US government. The risk of loss of any of these if held to maturity is nil.

Published in: News & Politics
  • Be the first to comment

  • Be the first to like this

Picking Safe Investments for Retirement

  1. 1. Picking Safe Investments for Retirement By www.ProfitableInvestingTips.com
  2. 2. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement There is a difference between investments that are currently making money for you and investments that will be safe into your retirement years.
  3. 3. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement A sad example of investors who did not exercise due diligence with their investments is the Bernie Madoff pyramid scheme.
  4. 4. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement One hundred seventy-six individuals, banks, pension funds, and charities were invested with Madoff and happy to be getting a great return on their money.
  5. 5. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement When the Madoff house of cards collapsed there were $65 billion in faked gains and investors lost about $18 billion of their investment capital.
  6. 6. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Picking safe investments for retirement is a skill separate from making money in stocks, real estate, and other investment vehicles.
  7. 7. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement The fact of the matter is that when you are retired you will want to enjoy retirement and be spending all of your time watching your portfolio.
  8. 8. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement How can you invest safely for retirement and not end up like Madoff’s clients?
  9. 9. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Picking Safe Investments for Retirement: What Are Some Choices?
  10. 10. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement US Treasuries Inflation Protected Treasuries AAA Corporate Bonds Dividend Stocks Real Estate Investment Trusts ETFs
  11. 11. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Picking Safe Investments for Retirement: US Treasures, Inflation Protected
  12. 12. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement In our article about how to invest without losing any money, we mentioned US Treasuries.
  13. 13. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement US Treasury bills have maturities of a year or less.
  14. 14. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement US Treasury notes have maturities from two to ten years.
  15. 15. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement And, US Treasury bonds have maturities of ten to 30 years.
  16. 16. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Each of these investment vehicles is backed by the “full faith and credit” of the US government.
  17. 17. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement The risk of loss of any of these if held to maturity is nil.
  18. 18. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement How to invest without losing any money in US Treasuries is to hold them to maturity or only sell them at a profit.
  19. 19. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Investors lose money in treasuries if they buy when interest rates are low and sell when rates are high.
  20. 20. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement If you buy treasuries when rates are really high you have the choice of holding to maturity and enjoying the return on investment or selling for a short term profit.
  21. 21. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement If you expect to need to use the principal from your investments over the years, construct a ladder of Treasury bills, notes, and bonds so that you will not need to sell bonds at a loss due to high interest rates.
  22. 22. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement The inflation protect variety of Treasury is a good idea if you expect inflation to take hold again like in the 1970’s.
  23. 23. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement In such a case the return on the Treasury is adjusted for inflation.
  24. 24. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Picking Safe Investments for Retirement: AAA Corporate Bonds
  25. 25. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement AAA investment grade corporate bonds are about as safe as US Treasuries.
  26. 26. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement The two US companies that issue AAA grade bonds are Johnson & Johnson and Microsoft.
  27. 27. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement As with Treasuries, create a ladder of bond maturities so that you do not need to sell long term bonds at the wrong time.
  28. 28. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Picking Safe Investments for Retirement: Dividend Stocks
  29. 29. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement In this case, you do not necessarily want the highest dividend.
  30. 30. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement What you want is the most secure dividend.
  31. 31. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement The Motley Fool published a list of companies that have been paying dividends for more than a century.
  32. 32. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Johnson Controls Stanley Black & Decker ExxonMobil Eli Lilly Consolidate Edison UGI Procter & Gamble Coca Cola Colgate Palmolive York Water
  33. 33. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement In retirement, it is a nice thing to get a dividend check or two every quarter.
  34. 34. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement And, it is nicer, if the dividends are likely never to stop.
  35. 35. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement If the past is any guide, these companies are a good bet for retirement investments.
  36. 36. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Picking Safe Investments for Retirement: REITs, Real Estate Investment Trusts
  37. 37. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement The rationale for picking a real estate investment trust is that these investments tend to do well even when the stock market falters.
  38. 38. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement And these investments pay dividends as well.
  39. 39. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Picking Safe Investments for Retirement: ETFs
  40. 40. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement In retirement it is a good idea not to put all of your investment eggs in one basket.
  41. 41. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement Thus, investing in a mix of US Treasuries, corporate bonds, dividend stocks, and REITs is a good idea.
  42. 42. http://profitableinvestingtips.com/bond-investing/picking-safe-investments-for-retirement For the stock market in general, an ETF or exchange traded fund is a good way to benefit from the steady rise in value of the market while avoiding losses from an individual stock.

×