5 Safe Asset Classes for New Investors

a stack of coins

New investors often look to save vehicles to grow their principal while they learn the ins and outs of the market. This is a natural way to begin engaging with the market, but you will quickly learn that some of the best opportunities — in both safety and growth potential — exist in a number of different asset types.


Finding the right opportunities for you requires some risk and research in order to correctly balance a portfolio for both long term security and the potential for high-quality growth to carry your initial investment into the future. Visit Wealth Rocket to get started on your research and build out a robust and functional knowledge base regarding all aspects of personal finance before returning to the market to put your new skills to the test and balloon your portfolio.


Index and mutual funds will get you started.


Index funds are simply a cross-section of the marketplace. A tech index, for instance, is a single stock in a fund that owns shares of tens or hundreds of tech-related companies. This is a great way to invest in the types of companies that you like without having to shell out a major sum of startup capital.


You may have invested your $1200 stimulus check in the market and found out quickly that it goes much farther in an index fund that is cost-effective for your available cash than a single share or a fraction of one of the giants themselves. Many mutual funds even payout exempt-interest dividends, meaning as a regular taxpayer and new investor, you won’t have an additional tax burden to consider with the influx of dividend payments on some or all of your investments in the market.


Gold and other precious metals are a great way to boost security.


Another high-quality asset is gold bullion. The price, like the stock market, is on a long-term upward trajectory. However, gold pricing is not correlated with the stock market’s rises and falls. This means you are insulated from market-specific factors that bring prices down in the short term. Diversification is a crucial component of a winning investment strategy, and physical commodities like gold or silver are one fantastic way to increase your overall stability while shielding yourself from market crashes or corrections that drive prices into uncertainty and losses.


Add bonds for stability.


Bonds are another great asset for generating stability. They are offered with terms upon their purchase. A bond will pay out based on its terms. However, these are nearly always beaten by long term stock market performance. During a downturn in the market, bonds are a great alternative in order to weather short term losses by locking in an interest rate for a fixed term.


For unwavering returns, think about CD options.


CD accounts offer the same stability but through a banking institution rather than the government. CD rates are typically commensurate with bond rates — although they can fluctuate more quickly. So, keeping an eye out for a great rate on any particular day is always a smart move. CDs don’t require a specific action to cash out at the end of the term so they offer a low maintenance way to lock in a marginal savings rate that can give you additional peace of mind during a fire sale on the stock market.


Consider alternative investments that you are already familiar with.


Lastly, alternative investment opportunities can give you increased stability in the market, provided you have a familiarity with the assets in question. For diehard baseball fans, a collection of signed baseballs or vintage rookie cards can give you that security you are looking for.


The catch, of course, is the knowledge to identify diamonds in the rough. Nearly any niche interest comes preloaded with a valuable commodity, finding the value in your own can help build a portfolio of secure wealth that can be traded for cash later as their value matures farther.


Investing carries risk, no matter what, but minimizing this with secure assets is a great way to lock in your long term, known growth and gives you increased ability to take risks on other investment opportunities.

Kaitlyn is one of our talented and experienced contributing writers, responsible for delivering well-researched, high-impact business and marketing articles and posts, in addition to crafting larger editorial pieces.

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