There are no investments that are completely risk-free. Even the safe investments listed above carry risks, such as the loss of purchasing power over time as inflation increases. Every investor is looking for a high return, but that's not the only factor that matters. When reviewing investments, professionals analyze not only the potential for absolute returns, but also what is called “risk-adjusted return”.
The bottom line is that not all returns are generated the same way, and smart investors seek to invest where they get the best value for the risk they take, even if that means accepting lower returns. To be perfectly transparent, no investment is 100% safe from all risks. Due to fluctuating markets and a sometimes unpredictable economy, it is difficult to say which individual investment is the safest. However, there are some investment categories that are much safer than others.
When it comes to investing, nothing is 100% safe. Investing means investing money in something, a financial asset of some kind, in the hope of obtaining a return. Where there is a chance of winning, there will always be a chance of losing. Risk and reward are two sides of the same investment coin.
When markets become volatile or have a continuous downward trend, as they have surely done in the current bear market, traditionally low-risk investments tend to have a time of uncertainty. And while low risk generally involves sacrificing high returns, in an environment of rising interest rates such as the one we are experiencing now, safer investment options, such as online savings accounts and certificates of deposit, are paying much more than in recent history. Investing in an REIT that is publicly traded on major exchanges rather than in a private fund is the safest investment option.