Many people wonder which is the best investment for conservatives, analyzing the various options in the market.
So if you have taken the test and consider yourself to be a person who is not very risk tolerant, the alternatives in this article are likely to be great choices for your portfolio!
Corporate Bonds
Corporate bonds are types of debt issued by companies. Some are low-risk, while others fall into the high-risk or "junk bond" category
Government bonds
These types of investments are bonds issued by municipal and local governments. In other words, they may do this to raise funds for road construction, for example, or other public projects.
Government bonds are among the best investments for conservatives because the risk of default is low.
Money market funds
A money market fund is a type of mutual fund that holds highly liquid investments such as cash and cash equivalents.
This option can be attractive to conservatives because it has less risk and is more liquid than other types of mutual funds.
As such, there are three main types of money market funds to choose from:
- First tier money market funds are those that invest primarily in short-term corporate and bank debt securities;
- Government money market funds are those that invest primarily in government-guaranteed securities;
- Tax-exempt money market funds, which may invest in municipal bonds or other forms of tax-exempt debt.
Tesouro Selic
Tesouro Selic is on the Tesouro Direto platform and can be a great option for those who want an interesting investment for their emergency reserve, for example.
By choosing this option, it is as if you were lending your money to the Government to receive it again with interest.
CDBs
Bank Deposit Certificates (CDBs) are among the best investments for conservatives because they are under the protection of the Credit Guarantee Fund (FGC), i.e. if the issuer does not pay, the entity compensates the investor.
DI Fund
The DI Fund is a collective financial vehicle that has a professional management, so if an investor wants to take part, he needs to buy a quota.
Since their objective is to replicate the CDI performance, a large part of the resources is invested in securities such as Treasury Selic and other private securities that follow the rate.
LCI and LCA
The real estate letter of credit (LCI) and the agribusiness letter of credit (LCA) are private securities issued by financial institutions to raise funds for these two sectors.They can be divided between:
- Fixed rate;
- Floating rate;
- Hybrid.
And one of the main advantages of this type of investment is that they are exempt from income tax, thus being great options for both conservatives and any other investor profile.
