Low risk investments for 2018 – AP
Investors looking to lower their risk are taking on more debt and investing in low-risk investments, according to a new report.
The report from Vanguard Group says the number of high-risk high-return investments rose by 8.5% last year to $2.2 trillion.
“While the overall high-yield market has experienced an uptick in the past year, we see an opportunity to invest in more low-yielding assets,” said Scott L. Ollins, president and chief investment officer of Vanguard Group.
“The combination of the Fed and the economy is allowing the market to appreciate, but the high-rate environment and low interest rates are holding investors back,” Ollings said.
He said investors need to take into account the risks of the markets and that they need to be vigilant when it comes to the potential for the bond market to collapse.
“With low-interest rates, investors can save more money than they otherwise would,” Olliks said.
The average bond investor can save an average of $3,000 a year by lowering their risk by $300 a year, or about $2,200 a year.
The market has been in a bull market for more than a year and is in its fourth year of positive growth.
Investors have bought into a lot of high yields, including Treasury debt, which is valued at nearly $1.2trillion.
The benchmark 10-year note, which has averaged 3.5%, has fallen from a high of 6.9% in late March to 3.3% in early June.
The Treasury bond market has seen its highest-ever gain, rising 16.3%, and the 10-yr bond market is expected to increase by 4% this year.