Please forward this error screen to 209. I’m planning to retire soon and would like to invest my retirement savings in something that’s secure and also generates high income. Low risk bonds to invest in can I find safe high-yield investments in today’s market? Granted, inflated risks on higher yielding investments may not always be apparent, and many investors lull themselves into a false sense of security by convincing themselves that higher risk isn’t there.
You don’t have to look hard for instances where people stretching for plump yields got burned. For example, many investors drawn to emerging market bond funds in recent years by payouts that were sometimes more than twice that of U. And the 2008 financial crisis is replete with examples of individual investors who bought ultrashort bond funds or bank loan funds with generous payouts on the assumption that those investment were secure, only to see their values drop precipitously. All of which is to say that you need to re-set your investment return expectations, if not your entire investing strategy.
Let’s start with what “safe” investments are available to you and what they pay. If by safe you mean investments that will not put your principal or investment earnings at risk of loss — and also offer you immediate access to your money without penalty or surcharges — then you have very few options. Basically, you’re talking cash equivalents, none of which have anything close to high yields. Treasury bills and money-market funds that limit themselves to the shortest-term Treasury securities certainly qualify as safe, but their yields are a paltry 0.