The year 2022 seems to be a year of hope and recovery for many investors. However, fear is still present among some, especially among those with a more conservative profile. Of course, there are always conservative profiles on a regular basis, trying to protect their money from inflation (especially this year, after the figures we have seen since mid-2021), but without having to take too many risks. Of course, it is important to emphasize that zero risk does not exist.
If you have 10,000 euros in
your bank account that do not report any interest rate and you want to invest those 10,000 euros without risk this 2022, in Finect we tell you what are the best options offered by the market. In this process, you may need a financial advisor to help you improve your investments, and you find it helpful to take a look at some low-risk funds to compare between one of them.
But, for now, let’s see how to invest with the least possible risk in this 2022.
Table of Contents:
Keys to risk-free money in 2022
If we want to invest 10,000 euros without risk and have some kind of return we will have to take into account several factors. And it is that in the market there are several low-risk products that can help us preserve our heritage. However, we must study them carefully if we do not want to end up incurring losses due to a combination of low returns and commissions that sometimes exceed the performance of these products. Therefore, if we do not have the help of a financial advisor to guide us, we will have to consider some keys before investing in this type of products:
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Associated expenses
Most savings and investment products are associated with a number of maintenance or management expenses. Before depositing the money into any product we will have to analyze the costs involved. For example, if we opt for a deposit for which we must open an associated account, we must make sure that this account does not involve maintenance costs or, if it has them, they are not very high.
Similarly, if we take on a remunerated account there are entities that will charge a fixed amount per month for the issuance and maintenance of the cards. On the other hand, if we opt for riskier products such as investment funds, we will also assume fees for management, deposit, subscription or redemption. In these cases, it is best to look at the TER percentage, which expresses the total expenses that we will assume when we have the product. Therefore, the lower this percentage, the greater the benefit for the participants.
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Product liquidity
Most products designed for more conservative investors focus on the long term, offering greater profitability the longer we keep money in the bank.
This is the case, for example, of deposits, because if we decide to recover the money before the established deadline we will do so, assuming some penalty or, directly, there will be no such possibility. The same happens with pension plans, with which we will not be able to enjoy the money invested until retirement or, at least, until ten years have passed since the first contribution.
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benefit
Risk and profitability go hand in hand. Therefore, if we want to invest in products that involve few risks we will have to take into account that the returns will not be excessively high. Therefore, it will be very important to make an analysis between the fees incurred and the expected returns, as well as to evaluate inflation, which can cause our savings to lose purchasing power.
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Risk profile
In the market there are countless options for all types of investor profile. For those who intend to invest, for example, 10,000 euros without risk, they can do so with a more or less aggressive profile depending on their financial situation and risk aversion. It will not be the same to invest in deposits than in funds (although these are more conservative).
If you want to know your investor profile you can consult it here.
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Product knowledge
“Don’t invest in anything we don’t know.” This is the main point on which all financial advisors agree. Before opting for any product we will need to know where we are depositing our money and the level of risk we are taking, especially if we are investors with great aversion to volatility and the ups and downs of the market.
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Purpose of the investment
The purpose of our investment of 10,000 euros will be fundamental when it comes to choosing the balance between a product with more or less risk. We will not choose the same product if we want to use that EUR 10 000 as a safety fund in the face of possible setbacks in the future rather than if we want it to have a better pension or simply accumulate capital without a clear objective.
Where to invest money with little risk?
When investing our savings we will have to take into account that the lower the risk we will enjoy a lower return for our investment of 10,000 euros. Therefore, depending on the level of risk we are willing to take, we can opt for different products. Starting from the options that involve a lower level of exposure we have:
Invest €10,000 in deposits
If what we want is to invest 10,000 euros without risk with the aim of maintaining our assets over time, deposits could be a good option. However, the average yield on two-year time deposits is currently at record levels. These products, which had served the traditional saver to at least protect himself from inflation and keep equity safe, now do not offer great returns.
However, if we move away from the Spanish market it is still possible to scratch some yields that can reach 1% of APR, which would imply a return of around 100 euros per year as long as we keep our money in the deposit
Among the options to invest 10,000 euros without risk in 2022, deposits would, of course, be the least interesting products in terms of profitability. Moreover, we should always ensure that profitability at least offsets inflation forecasts for the coming years. However, if you are interested in these products, you can visit our warehouse showcase.
Invest 10,000 euros in remunerated accounts
Remunerated accounts, such as deposits, are the options that, in terms of risk, can generate less headaches for their savers. However, these types of products currently also offer very low yields.
Therefore, before taking a paid account looking only at its profitability we will have to study what are the fees (if any) associated with the use and maintenance of the card. Among the best options on the market to maintain savings and that do not suffer from inflation stand out, for example, the Bankinter Payroll Account or the Sabadell Expansión Plus Account, which give about 3% of APR remunerating a maximum balance of 10,000 euros (2.74% APR the first year and 3% the next).
Invest €10,000 in guaranteed funds
In the scale of low-risk products in which to invest 10,000 euros are guaranteed funds. With them, the manager guarantees us that he will return the money we contribute to a certain term along with a small return. However, we will have to take into account that, in many cases, the commissions and expenses of the product will lead us to pay more than what we are recovering for the performance of our fund.
In addition,
before investing in a guaranteed fund we must consider the term at which we are going to put the money, since if we decide to remove it in advance we will lose the accumulated profits and, in addition, the manager will charge us for this.
Invest 10,000 euros in savings insurance
One of the alternatives that investors have to invest with little risk is savings insurance. These, unlike the rest of the products, are not offered by entities, but are provided by insurers. In this way, the money paid will also be guaranteed by the company itself and not by a Deposit Guarantee Fund, as in the previous cases.
Savings insurance is a life insurance to which we can make periodic contributions that will bring us back to the end of the term our guaranteed capital plus the profitability obtained. This yield is usually higher than that offered at this time by bank deposits, although lower than that of many investment funds.
If we want to invest 10,000 euros in savings insurance we will have to know the liquidity and solvency of the insurer in which we deposit our money, since the investment will be guaranteed by the company itself. In addition, we will have to take into account that paying the insurance in advance will also entail the payment of commissions. Some of the most interesting savings insurances offered by the market at the moment are the PIAS or Unit Linked.
You can learn more about how it works in these articles: Here’s how a PIAS works Are they right for you? And this is how a lined unit works: advantages and disadvantages. In addition, if you want to analyze the products you can see our showcase of retirement investments.
Invest €10,000 in bond or bond funds
Fixed income is another ally of the most conservative investors. In this case, if we decide to invest 10,000 euros through a fund or directly in public securities or treasury bills and bills of exchange of companies we will have to choose the product very well, since, otherwise, it will not compensate at the level of profitability. This is due to the policy of low interest rates that central banks have in place to try to stimulate the economy after the coronavirus crisis.
If we choose to invest 10,000 in a bond fund there are some options that, in the last year, accumulate positive returns, although many of them give losses in the medium and long term. Here are the best bond funds.
Invest $10,000 with a roboadvisor
Although it is not a product
in itself, if we want to invest 10,000 euros without risk and it is not clear to us the right product we can always resort to a financial advisor to help us plan and manage our finances. If, otherwise, it is sufficient with a tool that configures an investment portfolio according to our profile we can also use roboadvisors.
These automated brokers, who use an algorithm to set up portfolios based on our profile, invest our money in funds (usually indexed). Of course, in these cases the level of exposure is higher, although we can always adjust it even below our risk profile without forgetting that the fees do not exceed the return on our investment.
Invest 10,000 euros in conservative investment funds
If our level of risk is slightly higher and we are willing to invest 10,000 euros in investment funds, the most conservative funds will be the most suitable for our profile. These products are characterized by a much lower risk because most of the assets in which they are invested are fixed income. However, the range of assets that opens up to us with these products is very wide, so it is possible to combine a strong exposure to fixed income with some variables if we are willing to take on a small level of risk.
In particular, according to a bankinter report on the outlook, experts recommend that local (eurozone) investors maintain a level of exposure to equities of 25% if they have a defensive profile and 35% if they are cautious.
And it is that more conservative funds, although they involve greater risk, generate a higher return if we compare them with deposits. In this tool that we leave you below you can see how much you could earn by choosing, for example, a conservative fund instead of a deposit.
