Safe investing today is a concern of many people, especially in light of the uncertainties in our economy. In 2023, we have left behind the bullish post-pandemic period, and fear about inflation has taken over many people who are looking around at how to adequately protect themselves.

What will happen in 2024?

You probably also ended up on this article because you are looking for safe investments with guaranteed capital or a low degree of riskandtoday we will try to figure out together what to do.

There are not a lot of safe forms of investment, but with the information you will find in Affari Miei, you will find out how to move forward to manage your money wisely and thoughtfully.

I promise you that reading this article will be exhaustive and allow you to acquire all the information you need, but let's not get lost in too many turns of phrase and start now!

What are safe investments?

Everyone dreams of makinginvestmentswithout risk,but what exactly is a safe investment? According to one strand of thought, it is a type of investment that offers a guaranteed return, with no risk of causing a loss. Certainly this is a simplification.

Remember that if you want to achieve results, even without necessarily investing large sums, you need to take risks: it is an inherent concept in the concept of investing itself.

Precisely for this reason, many investors prefer to opt for very conservative investments, but in the long run these may not yield enough to protect the capital from inflation.

But how to tell if we are opting for a safe instrument? First, it should be

• An investment recommended by a serious and reliable professional who can identify the appropriate level of risk for the investor, perhaps as part of financial advice.
• A well-diversified investment with a long time horizon.

Security comes after setting goals

As an independent financial advisor, I must caution you: the first thing to understand if you want to invest without taking risks is that you need to define your GOALS well

The products are the TOOLS for investing, what you have to put in your head, if you are looking for security, is that before you move a single euro you have to acquire a minimum of awareness of what you really want to do.

If this is your first time on Affari Miei you will have noticed that, unlike the other anonymous sites on the web, this is the only one in which you can find a face - mine - and a person who believes so much in what he says to the point of putting his face on it. The others don't, and if I were you, I would ask myself some questions.

You see, as of 2014 I have written over 2 thousand articles and made hundreds of hours of videos and podcasts: there is so much material on Taking Care of Your Finances on Affari Miei that it might be hard to know where to start.

That's also why I thought to create this introductory quiz that, based on your expectations and your starting situation, helps you identify your goals and the best tools to achieve them.

If you are just beginning your research on investments, I suggest you start here because, thanks to this convenient tool I created, you will be able to access the largest archive of content on finance in the Italian language.

>> Take the Quiz Now <<

Some useful concepts to get along with

If you are reading this article it is because you want to limit your exposure, you don't want volatilit or too much trouble. I'll answer, then, right away your initial question that probably brought you here: how to invest safely?

Simple: by becoming aware of the environment around you.

In recent years, financial markets have given investors significant returns

However, in our country people still prefer to focus on low-risk instruments such as government bonds, deposit accounts and policies.

While these could once have been viable investment options, today, with rising interest rates and prices,exposure to financial markets, especially equities, remains the most promising choice for generating long-term returns.

To better understand this, however, we need to set some important points:

• There is no return without market risk: although the long-term performance of stock markets has been positive, negative moments cannot be ruled out, such as, for example, the recent crisis in Ukraine in early 2022. Many investors may be tempted to act on impulse or deviate from their long-term investment plan, but this is a crucial mistake. Time, in fact, is the investor's best ally.
  Historically, markets have shown an upward trajectory, and at this time, there are few alternatives to stock markets for the average investor. Safe investments, understood as those that can generate positive returns, are long-term solutions within a well-diversified portfolio with great attention to risk management. This points to the best way to invest one's liquidity today;
• Rising interest rates struggle to provide high protection from inflation, penalizing "safe" or guaranteed investments that, in a rising inflation scenario, have difficulty providing a positive real return
• Predicting market movements in the short term is very difficult: if you are not an insider you risk being overwhelmed by events, which is why it is always advisable to structure a long-term plan that is inclusive of as many scenarios as possible and that can allow you, in an organized manner, to be covered at all stages of the market.

Risk-free investing: what opportunities for those who want risk-free investments?

When one thinks of money management, the mind immediately goes to financial products or instruments, and in all likelihood, you too expect commentary on the main options.

In this part of the article we will deal with just that.

How to invest money in the bank without risk? Safe deposit accounts

What are the risk-free bank investments? Deposit accounts historically have been in the basket of safe investmentsmost liked by consumers.

In recent times we have seen a gradual increase in yields, which is leading people to have more confidence in these instruments, although, mind you, we are still talking about yields that could be as high as 5 percent gross at most. Remember: if an instrument is safe it will not be very profitable by its very nature!

If you are interested from this perspective, check out TOP Deposit Account now.

Affari Miei's new free service gives you a constantly updated overview with all available offers sorted by yield and duration.

If you are looking for a deposit account, TOP Deposit Account is the best solution for you.

Is investing in BTPs safe?

Once upon a time there were the BTPs so beloved by Italian savers: little thought, acceptable returns, virtually zero risk.

Today this form of investment cannot be considered as safe as it once was, but the risks are still limited because Italy is embedded in a stable European environment.

On security I have expressed myself in this video, which I invite you to watch to learn more:

Also read more:

• General Guide to BTPs
• Best BTPs to buy today
• BTP risks: what are they?

Postal Passbook

Let's turn to another traditional solution: the postal passbook.

As of today, the promotion on the Libretto Postale Smart, a proposal that in the beginning seemed very interesting to us because it associated the passbook with additional functions (with the card you can receive transfers by signaling your IBAN and buy dematerialized Bfp) and allowed you to get other interests given the low risk profile: 1.25 percent gross per annum was the rate put on the plate by the Post Office for those who became customers in the first part of the year.

Postal savings bonds: are they still affordable?

Let's start with postal savings bonds: a historically popular solution for Italians, postal savings bonds offer safe though low yields.

Almost derisory is the gain if you decide to invest in 18-month postal savings bonds, while more interesting appears the interest horizon on medium-long maturities: in many cases, in fact, the interest is assigned annually or in determined maturities, so in addition to the return of the guaranteed capital, you can still choose medium-long term investment proposals and withdraw the money sooner.

Favorable taxation, then, is certainly an added advantage.

Safe investment funds: which ones to choose?

Mutual funds are baskets that include other instruments that allow us to diversify. To be considered less risky, such funds must by necessity invest in less risky asset classes, specifically government bonds.

If you are oriented toward these forms of investment, here are some resources for you:

• Guide to Mutual Funds
• Guide to money market funds: are they really safe?
• Guide to investing in passive investment funds
• Best mutual funds
• Best passive global bond funds

Guaranteed-capital investments

Here, too, we could start with a "once upon a time" because there used to be products that guaranteed us a constant annual interest rate. In most cases they were insurance policies and pension plans that, since they bought BTPs and the like for us, took advantage of the most favorable market conditions to offer such solutions.

Today such solutions are increasingly rare but not entirely absent. To learn more, read the following resources:

• Insurance Investment Guide
• Introductory Guide to Supplemental Retirement Planning
• Investment Certificates: is the principal really guaranteed?

Investments with low to medium risk

If you have come this far, you have realized that there is no magic wand, but we can still carve out spaces for ourselves by devoting some time to our financial education.

If you feel like committing some time and mental resources, you can read my guide on individual financial planning.

You will understand why an advanced investor faces risk and controls it more than avoids it, and I will provide you with my insight by telling you how I manage my finances.

Let's look at a brief roundup of those investments that, while not 100 percent safe, should be part of your past experience or, at any rate, could be part of your future endeavors.

Traditional real estate investments

One of the most common myths in the past was the safety of real estate investments. The industry is far from easy and accessible to everyone; I have talked about it on several occasions here on Affari Miei.

You can delve further, too, by checking out the mega guide on real estate investing I wrote for you or the topic section of the blog.

That being said, pointing out that investing in real estate is by no means 100% safe does not mean that it cannot be an opportunity. My preferred strand, especially for newbies, is income properties because it allows you to start more mildly even without starting full time right away.

In my opinion the risk is more medium-high than low but I included this paragraph because I know that many people consider real estate an "easy" thing and I was pleased to bring my views to your attention. On the topic of buying your first home for investment use, I invite you to take a look at these thoughts.

Investing in ETFs

ETFs fall into the category of mutual funds and are characterized by a number of advantages such as:

• optimal diversification;
• maximum liquidity;
• transparency;
• lower management fees;
• accessibility to all through home banking.

Since these are financial instruments, however, caution is a must and in-depth study is recommended before investing in them.

In this regard, I recommend reading Affari Miei's general guide to investing in ETFs in which I provide all the resources you need to get started.

If you are interested in investing in ETFs, I also recommend downloading our report on ETFs.

Bonds

Bonds are investment vehicles that allow investors to purchase debt securities of a state or corporate(corporate) issuer by turning investors into creditors of the issuer.

Such products can be zero-coupon, i.e., without coupons, or with fixed- or variable-rate coupons.

Among the investments considered safest are government bonds issued by states, especially developed ones, or by companies judged most reliable by rating agencies

The topic is so complex that it deserves a separate in-depth study and, therefore, you can read the general guide to bonds here.

Here I outline schematically the main risks you need to be aware of when approaching this market:

• Credit risk: This concerns the failure of the issuer. For government bonds, it is the risk of default by the issuing country. It is not at all rare: countries like Argentina or Venezuela have also defaulted several times;
• Rate risk: for fixed-rate bonds, there is the risk that rising interest rates will devalue the value of the bond. "Duration" indicates the sensitivity of the bond to changes in the interest rate. If the interest rate increases, the value of the bond decreases and vice versa.

Among government bonds, we pay special attention to supranational and inflation-indexed bonds:

• Supranationals: credit risk is almost nonexistent, but interest rate risk and the risk of reinvestment of coupons at a lower rate than the initial rate are present. In addition to this, the currency of issue must be considered. Often, such instruments offer attractive returns because they are issued in emerging currencies, but foreign exchange risk can erode the return on investment;
• Inflation-indexed: the coupons and face value at maturity of these products take into account the level of inflation in the reference currency area. In addition to the typical risks of bond instruments, one must consider inflation rate risk, that is, a reduction in inflation that would result in a lower return on the bond;
• bank bonds: these are corporate products that allow you to become a creditor of the lending institution. They can be senior or subordinated: senior bonds are safer, as the holder participates in losses only after shareholders and subordinated bondholders. However, bank bonds may not always be liquid, generating difficulties for the investor wishing to liquidate the asset because of the lack of transparency and the inability to identify the trading price in the secondary market, especially in case of negative events for the bank.

To learn more read the guide on the best bonds to buy.

Micro Real Estate Investments Online

If you are looking around for small, high-margin investments, surely platforms that allow you to participate in small real estate development projects with low amounts like €50 or €100 are worth considering.

Of course, we are not dealing with fully guaranteed capital investments, but they can be a diversification opportunity to consider.

To explore this further, visit my article dedicated to online platforms that pay up to 10 percent.

Equity investments

Higher profit = higher risk

This is a concept expressed several times on Affari Miei whenever the topic of investments has been broached.

The bookstores are full of theories about the not-so-abstract concept of security in an age like today that is itself insecure.What we are interested in knowing here is that the more you tend to lower your risk, the more, of course, your potential gains will be lowered.

Although this page is devoted tosafeinvestments, I devote an informative paragraph to the other riskier solutions that the market offers us today.

Here are some useful resources that you can consult right away to learn more:

• Best Trading Platforms: Choose the Right One for Investing
• How to Buy Stocks: Which Stocks to Choose?
• Best stocks to buy: how to choose?

What is the safest investment?

There is no one-size-fits-all answer to this question: we have seen all the possibilities we face to invest our money and/or savings safely.

However, if I had to tell you what is the absolute safest investment to undertake today, I would be in trouble because in investments there are always variables that have to be considered: the time horizon, the investor's risk profile, diversification and many, many other things.

In fact, you have to know that not knowing your personal and financial situation, I cannot give you unequivocal advice on which is the safest investment you should choose: as we have already seen, for example, deposit accounts are guaranteed by the Interbank Deposit Protection Fund, so to tell the truth on this instrument you might be comfortable.

But we have seen that it is not the only possible solution.

How to make safe investments

Having seen all the possible solutions for an investment, all we have to do is rewind the tape for a moment and go back to the starting point, which is about how to get started and what to do before investing.

First we should worry about setting up an emergency account because, as I like to say, before we go to war it is good to protect ourselves!

Then we might think about keeping track of our expenses, setting a budget, and above all saving money, as that is the first thing to do if we later want to invest.

How to Invest Money Risk-Free in 2024: Today you can aim for even 4% but..

This part of the article is the part where I will go into more detail because it contains my opinions

I have two pieces of news for you: one good and one bad. The good is that today you can bet even 4 percent with relatively low risk; the bad you will find out as you go along.

If we had asked this question up to two years ago, we could have concluded it in two words: you are fantasizing.

Today it is possible to get a nominal yield of 4 percent (note "nominal") in a rather simple and low-risk way. Given the current yields on 10-year BTPs, you literally just buy these instruments and you're done. On paper this is not an entirely risk-free investment, but in practice it is almost impossible for the Italian state to go bankrupt in the next 10 years.

Deposit accounts come close, now offering yields close to 3 percent. If we then look at the world of corporate bonds offered by very solid issuers, yields are easily above 4 percent. A private company does not offer the same guarantees as the public coffers, but even then there are realities that are so solid that they have virtually zero credit risk.

Now that I have given you a simple and concrete answer, let me shatter any certainty you may have.

The argument so far holds up because we are only and always talking about nominal returns.

By the end of 2024, an inflation rate of 3.6 percent is expected. It means that in these two years, a nominal yield of 4 percent implies a net loss of purchasing power.

After these two years have passed, the inflation rate is expected to settle back to around 2%, so yes, those who get a nominal return of 4% are getting a net return. Of 2%, though, not 4%.

If your goal is to get a real 4% return, then I'll give you bad news: you are exactly where you shouldn't be. You are not satisfied with the small net yield offered by bonds offered by reputable issuers, but at the same time you want to invest in something that is extremely safe. The two do not go together.

On average, a person is lucky if he or she can get a 2 percent net return by investing in instruments that are so low-risk that they can be approximated as "safe."

On the other hand, stock markets offer an average annual return of 9 percent but are far from safe.

The target of 4 percent may be the result of a mixed portfolio, but that has no safety: at best, compared to an all-equity portfolio, you can take advantage of slightly lower volatility.

Anything over 2 percent after inflation involves tangible risk, mainly volatility risk.

It means you have to be at least willing to see your capital fluctuate, remembering that until you sell you don't collect any loss. I would also like to mention that, if we really want to be precise, fluctuations are there with BTPs as well: did anyone remember to check the prices of the BTP Italia bonds of the last issue, for which so much fuss was raised? I won't spoil the surprise by posting the chart here.

The good news is that 99% of people who would like a safe yield of 4% have no need to actually find some instrument with which to get it.

You can get a significantly higher return by investing in an equity portfolio with a long-term view.

If you are under forty, you should not even think about it; it is one of those right decisions that anyone would make if personal financewere taught-as it should be-as early as middle school. In the long run there is simply no doubt that a well-diversified equity portfolio gets more than 4 percent per year on average after inflation, although anything can happen in the short term.

For those with a shorter investment horizon, then it may make sense to settle for something less.

But it is important not to get caught up in bizarre ideas, such as going downstairs and knocking on the real estate agency to look for a property to rent.

In that case, 4 percent after inflation is achievable only if you really have a mix of specific skills, planning and luck.

Security with real estate investment is never there: delinquent tenants, vacant apartments, and extraordinary maintenance are things few people think about before buying an apartment. Not to mention that to the buying and selling price you have to add all the various relevant taxes before calculating the potential profitability.

In short, today getting a "safe" 4 percent return is possible and even seems easy.

But dig a little below the surface and you'll see that no one is giving you anything for free: simply, people are still used to not having to deal with inflation because they haven't had to in the last 15 years. Once you consider this variable, once again, you will find that there are no free meals on Wall Street.

Additional useful resources

A single article, no matter how hard written, can never answer all the questions that a user, legitimately, asks.

For this reason, I offer you a review of other content on the blog that may be of interest to you if your goal is to procure more financial resources to invest as you see fit, perhaps benefiting from the advice of Affari Miei:

Enjoy your continuation on Affari Miei!