University of Illinois Extension

Your objectives

Develop an investment plan

Risk free investing?

Describe yourself as an investor

How much volatility can you tolerate?

How do you decide which type of investment to make?

Guidelines to earn 2 percent over taxes and inflation

Be an informed investor

Asset allocation

How much is enough?

For further reading/ References

 

 

Based upon the type of investor you consider yourself to be, choose investments from the following levels of risk:

Level 1. Conservative (low risk, predictable income)

  • Insured savings accounts
  • Certificates of deposit (CDs)
  • U. S. Savings Bonds, series EE and HH
  • Treasury bills
  • Government-secured money market funds
  • Interest-bearing checking accounts
Level 2. Moderate (income producing with very low risk)

  • High-grade corporate bonds
  • High-grade municipal bonds
  • Balanced mutual funds with low-risk rating
  • Money market accounts
Level 3. Moderate (income producing with medium risk)

  • Blue chip stock
  • Preferred and common stock
  • Aggressive mutual funds
  • Rental real estate property
  • Annuities
Level 4. Maximum Return Investor (high risk, potential for high return)

  • Speculative stocks
  • Real estate investment trusts (REITs)
  • Commodities
  • Limited partnerships
  • Puts, calls and options
  • Junk bonds
  • Gemstones
  • Gold and precious metals
  • Futures contracts
  • Collectibles
  • Penny stocks

 

 

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