10 best low-risk investments in December 2023

As the economy faces high inflation and the Federal Reserve raises interest rates in an effort to limit the rise in prices, the U.S. could be headed for a recession. Building a portfolio that has at least some less-risky assets can be useful in helping you ride out volatility in the market.

The trade-off, of course, is that in lowering risk exposure, investors are likely to earn lower returns over the long run. That may be fine if your goal is to preserve capital and maintain a steady flow of interest income.But if you’re looking for growth, consider investing strategies that match your long-term goals. Even higher-risk investments such as stocks have segments (such as dividend stocks) that reduce relative risk while still providing attractive long-term returns.

What to consider
Depending on how much risk you’re willing to take, there are a couple of scenarios that could play out:

No risk — You’ll never lose a cent of your principal.

Some risk — It’s reasonable to say you’ll either break even or incur a small loss over time.

There are, however, two catches: Low-risk investments earn lower returns than you could find elsewhere with risk; and inflation can erode the purchasing power of money stashed in low-risk investments.Here are the best low-risk investments in December 2023:

1.High-yield savings accounts
2.Series I savings bonds
3.Short-term certificates of deposit
4.Money market funds
5.Treasury bills, notes, bonds and TIPS
6.Corporate bonds
7.Dividend-paying stocks
8.Preferred stocks
9.Money market accounts
10.Fixed annuities
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