8 Tips to Invest Without Too Much Risk

Get 8 investment tips to help you build wealth even if you hate risk.

Laura Adams, MBA
5-minute read
Episode #208

Investment Tip# 6: Make Appropriate Investment Choices

The markets have a massive selection of securities and funds that are just right no matter your appetite for risk.

Whether we’re talking about stocks or bonds, there’s a range of risk within each of those categories. For instance, aggressive growth stock funds are riskier than income stock funds. And poorly-rated, junk bonds are riskier than bonds issued by the federal government. So saying that the financial markets are just too risky is like saying there’s nothing to eat at the grocery store. The markets have a massive selection of securities and funds that are just right no matter your appetite for risk.

Investment Tip #7: Start Investing in Small Amounts

To gain confidence in your investments, don’t do anything rash. Start by choosing investments that have performed well over the past five to ten years and commit to buying small amounts on a regular basis. If you need help picking investments suited for your risk tolerance ask your benefits administrator at work, consult with your broker, or get ideas from an investing magazine like Money or Kiplingers. 

Investment Tip #8: Don’t Monitor Your investments Too Closely

It’s easy to get spooked if you constantly obsess over your investments. If your goal is to build wealth over a long period of time, what your investments do day-to-day is largely irrelevant. Monitor your monthly or quarterly investment statements to stay on top of their performance, but remember that what really matters is how much they’ll be worth in 10, 20, or 30 years from now, when you need to spend the money. You want to see a trend of growth, but some years may give you temporary setbacks.

Jenny, thanks for your question and congratulations on accumulating such a nice nest egg before your 30th birthday! The best way to get a good return on your money without taking too much risk is to start early, diversify your investments, keep enough cash on hand for emergencies, and to consider turning to a financial advisor for help.

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Connect with Money Girl!

If you’re ready to make big changes in your financial life, find out more about Laura’s one-on-one Financial Life Coaching at SmartMovesToGrowRich.com. For more money tips and advice, sign up for the free Money Girl newsletter and connect on Facebook and Twitter. E-mail your money questions to money@quickanddirtytips.com.

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.