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Investment Dictionary


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Safe Investments

 

Safe investments are investments that contain low risk and considered to be safe. Safe investments do not necessary have to be 100% safe because there is no 100% safe investments in this world as this world isn’t safe that much as a place.

 

Some investments (as an asset classes) are exposed to market volatility risk while other to inflation. The derivatives even possess additional risks depending on the deal structure. 

 

However, it is common to consider that short-term bonds (bills) of high credit rating issuers are safe. High credit rating guarantees (only at some rate of accuracy) that default risk will be avoided and investor will receive its interests and par value of bonds. And short term should help to avoid a risk of inflation because usually inflation builds up slowly. But the yield of such safe investments can be measurable (sometimes even negative, for example, a Danish government bonds in the beginning of 2012) and safe investments can be tools that can be used only for short term investment.

 

 






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