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  • May 5, 2008 1:28 pm US/Pacific
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'Risk-Free' Investments

QUESTION:   Is there anything that is considered a 'risk-free' investment?

ANSWER:  Usually a certificate of deposit fully insured by the FDIC is considered risk free.  A treasury bill, note, or bond are all considered risk free with the full faith and backing of the US Treasury.  Anytime a rate of return is higher than either one of these two instruments, there is a risk associated with that particular investment.  The return you hope to achieve and the amount of risk taken are directly related.  There is no such thing as a high return, no risk investment. 
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Money Matters is provided by:

David Schauer, CFA, MSFA, CFP®
Financial Planner
Hanson McClain
E-mail questions to moneymatters@kovr.com

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