happy seniors2It is no wonder there are some individuals who fear investing in the stock market. The turbulent market over recent years has surely given them all the fear that they need. In fact, many people got so badly burned in the recent housing crisis that they may never get back in the market. Unfortunately for them, that is exactly the wrong decision. The market has roared back in the years following the crisis, and those who were not involved in it missed out on that huge rally. That being said, there are some groups of people who should indeed look to keep their money safe but still invested.

A Little Risk, A Little Reward

Safe investments for retirees are a hot commodity because retirees more than anyone need to have that security blanket of safer investments. It means that they should look for low risk, low reward type propositions that can give them a little return but not put their entire nest egg at risk.

Investments That Meet This Criteria

In order to find the right investments for any group of people, it is important to look at the whole range of possible choices. You can begin at the extreme ends of the scales and narrow it down from there. On the one end you have savings accounts which pay next to zero interest these days, but at least maintain the principle deposited. On the other end, you have things such as single stocks and options which are among the riskiest investments one can make (unless you include the choices available in casinos!).

For retirees, the investments most appropriate for their stage in life tend to be closer to the savings account side of the ledger. However, this does not mean they should keep all of their money in a savings account. This would lead to the money being eaten up by inflation. They should look to at least earn a return at least equal to inflation if not slightly higher.

A good choice to reach this goal might be in mutual funds that focus on income stocks. They are often called “income funds”, and they tend to invest the money in stocks that pay dividends and do not gain or lose much in value over time. Ideally, they simply slowly increase in value over the years while at the same time providing a dividend that pays the investor for holding them.

Diversify And Re-balance Often

Retirees should be advised to diversify their holdings and re-balance them on a frequent basis. This too helps secure their money against market turbulence and protects them from the risk of losing money on a financial adviser who does not know what he or she is doing.

When they re-balance, they are simply taking some money off the table from the investments that have worked and putting them into the laggards in their portfolio. This helps to always have some balance throughout the entire portfolio.

These strategies are unlikely to ever produce stunning results, but they do help keep the retiree’s money safe and growing at a reasonable rate that at least keeps up with the rate of inflation. That is honestly what most are looking for in their golden years in the long run after all.

Always Be On Your Toes

The final piece of advice to take into account is the idea that you should always be on your toes and aware of what you are doing. There are some things pitched as “safe investments for retirees” that are blatantly not. Unfortunately, there are some bad actors out there who will do whatever they can to try to take advantage of people. The retiree group is one group they often feel is vulnerable and will try to push out products that make a big commission for themselves.

When confronted with this possibility ask yourself three questions:

Is this product something that I really understand?

Does this investment have a ten year or great track record of stable returns?

Does my adviser have my best interests at heart?

If you can answer “yes” to all of these questions, then you are likely in a safe investment that will do what it is supposed to do for you. Anything short of that and you risk getting into something you do not want. Keep these ideas in mind and invest safely.