PRESERVE YOUR CAPITAL BY INVESTING IN LOWER-RISK INVESTMENTS

Every investment carries a degree of risk. While some assets are inherently “safer” than others, it’s crucial for investors to understand the spectrum of risk to align choices with their tolerance and financial goals. This article will examine various investment types, including real estate syndication, and their respective risk profiles. Bonds, for example, are generally at a lower risk than other investment vehicles, while treasury bonds are usually lower risk than corporate bond funds. [1][2]

To identify lower-risk investments, we first need to define risk. Risk refers to any level of uncertainty that can harm the investment and the investor’s financial welfare.

Some investors have more risk tolerance and are more comfortable with higher-risk investments. This may be due to their financial situation or their level of experience when it comes to investing. They may have an emergency fund if their investments don’t pan out. However, the average investor typically has a lower risk tolerance and seeks lower-risk investments.

Still, no investment is risk-free. Make sure to consult your investment advisor before making any financial decisions.

HIGH-YIELD SAVINGS ACCOUNTS

High-yield savings accounts are highly liquid and can be immune to market fluctuations, making them one of the safer investment options.

A high-yield savings account is a type of savings account that usually pays 20 to 25 times the national average interest rate of standard savings accounts. People have traditionally kept their savings accounts at the same bank where they hold their checking accounts. This means that transfers between the two have been simplified. However, because of internet-only banks, the competition for savings rates has skyrocketed. This created a new category, which we now refer to as high-yield savings accounts. [3] These bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC). However, not all high-yield savings accounts are FDIC-insured. Confirm whether your account type qualifies for FDIC insurance before making final decisions.

Investors must remember that their money could still lose purchasing power if inflation exceeds the annual percentage yield (APY). [1] If an investor is holding $5,000 in savings, for example, and the national average is 0.10 APY, they would return just over $5 for the year. But if they put that same amount in an account earning 2%, they would earn $100. This means high-yield savings account rates offer a significant increase in earnings. [3]

GOLD

Many investors consider gold to be the ultimate low-risk investment. Gold can serve as a haven for their money because it is protected against inflation over the long term.

Gold may experience drastic price swings over the short term. However, it can hold its value over the long term. This precious metal could also be suitable for diversification. Since it is a monetary asset, you can diversify your portfolio away from dollar-denominated assets. [1]

When it comes to low-risk investments, gold is one of the things that could help you achieve financial stability. It is one example of lower-risk investments that investors could consider.

CERTIFICATES OF DEPOSIT

Similar to a high-yield savings account, certificates of deposit (CDs) can also be one of your low-risk investments. It can also help you create a diversified portfolio. Certificates of deposit are generally ideal when you don’t need immediate access to your money but still want to earn more than your traditional savings accounts.

Do keep in mind that CDs lock up your money for a predetermined amount of time, which will reduce your liquidity. However, you get to enjoy higher rates. CDs also charge penalties if you withdraw your money early. This usually involves a few months of interest. There are no-penalty certificates of deposit, but they generally offer lower yields. [1]

U.S. TREASURY BONDS

Treasury bonds, or T-bonds, are government debt securities issued by the U.S. federal government. Treasury bonds have maturities that exceed 20 years. They earn interest periodically until they mature. At that point, the owner is paid an amount equal to the principal value. [4]

Treasury bonds are part of the larger category of U.S. sovereign debt, known as treasuries, which also includes Treasury notes, Treasury bills, and Treasury Inflation-Protected Securities (TIPS). These are considered very low-risk because they are supported by the U.S. government’s ability to tax its citizens. 

T-bonds are often described as one of the lowest-risk investments available. While they are considered highly secure, they are still subject to interest rate and inflation risks, which can affect value over time, and their generally low yield makes them less attractive to certain investors. However, because the U.S. government has never defaulted on its debt, these treasuries are a reliable option for investors seeking stability and lower risk. [1] 

SERIES I SAVINGS BONDS

Another investment type with lower risk is Series I Savings bonds. Investors can protect against inflation with Series I Savings bonds while earning interest. Unlike TIPS, which can sometimes have negative yields, these are government-backed bonds whose yield cannot go below zero. [1]

With Series I Savings bonds, investors can only invest up to $10,000 per year per Social Security number. However, Series I Savings Bonds can earn interest rates for up to 30 years, but they must be held for one year before being redeemed. You may also forfeit three months of interest if you cash them out before you have held them for at least five years, similar to early withdrawal penalties on CDs. 

CORPORATE BONDS

Corporate bonds are debt securities issued by firms and sold to investors. Investors are paid a certain amount of interest while the company gets the capital it needs. Interest rates may be either fixed or variable. Once the bond reaches maturity or expires, the payments cease. The original investment is then returned to the investor. [5]

Corporate bonds make for safer investments because they are backed by the company’s ability to repay them. The company’s physical assets may also be used as collateral on rare occasions. Corporate bonds help companies raise money or capital. By buying corporate funds, investors are basically lending money to the company. In return, they get a series of interest payments. [1]

Corporate bonds may also trade on the secondary market. They also tend to have higher interest rates because they are considered somewhat riskier than U.S. government bond funds. This is to compensate for the added risk. Not all companies have the same repayment record as the U.S. government.

High-quality bonds are usually called “Triple-A” bonds. On the other hand, the least creditworthy bonds are called “junk.”

Investors who want to ensure they are making a prudent investment can review the bond rating. Investment-grade corporate bonds are rated AAA, AA, and BBB. If you want to prioritize a secure investment, consider these. But if you have a higher risk tolerance and want even higher yields, consider corporate bonds with a rating different from those mentioned above. These carry a higher interest rate risk but can offer a better yield. [1]

Investors can also avoid fees when purchasing corporate bonds by looking for bond mutual funds and ETFs that invest in thousands of company bond funds.

MULTIFAMILY PRIVATE PLACEMENT (SYNDICATION)

Real estate can serve as a diversifying alternative for investors, offering opportunities for passive income and potential growth within a distinct investment approach. Depending on location and other factors, real estate properties may be considered ideal investments.

Real estate can also be a resilient asset class even during economic uncertainty because people will always need a place to live. Apartments and other multifamily properties can still generate cash flow even during a recession.

Multifamily private placement, also called syndication, allows accredited investors to pool resources and invest in real estate without worrying about maintenance, repairs, residents, and other responsibilities associated with being a landlord. It is also a strategic way to diversify your investment portfolio.

A syndication deal is a real estate deal in which several investors pool their funds to buy a single property or portfolio. A sponsor, also known as a syndicator, is responsible for putting the deal together. They will locate the real estate property, secure the loan, and identify passive investors who will provide a portion of the capital in exchange for equity upon resale and monthly cash flow. [6]

A private placement (syndication) deal is an example of a passive investment with potential for attractive returns. While almost any real estate property can be used for a syndication deal, multifamily properties are the most popular for this investment strategy because of their potential for strong cash flow. Multifamily properties also don’t have to worry much about vacancies. Even if one or two units become vacant, the remaining units can still generate income monthly. [6] Plus, if a real estate property is well-located, vacant units could fill very quickly.

CONNECT WITH AN INSTITUTIONAL REAL ESTATE OWNER/OPERATOR 

Working with a sponsor you trust is essential because, as this is a passive investment, they will make all the labor-intensive decisions regarding property management, renovations, and other aspects.

BAM Capital partners with accredited investors who want to enjoy passive income and all the other benefits of multifamily private placement. As the private equity arm of The BAM Companies, BAM Capital has been focusing on buying assets targeted as having strong profitability potential and staying disciplined in its investment thesis. BAM Capital’s investment strategy aims to create forced appreciation while mitigating investor risk. To date, the brand has successfully managed over $1.7 billion in assets across ~9,000 apartment units.

Remember that no investment is without risk. Before making financial decisions, consult your investment advisor and schedule a call with a BAM Capital investment team member.

For additional multifamily real estate insights, visit Pathways to Passive Wealth, BAM Capital’s new platform designed to make real estate investing more accessible, transparent, and achievable for aspiring and experienced investors.

Disclaimer: All investments carry risk, including potential loss of capital. This content is for informational purposes only and is not financial, legal, or investment advice, nor an offer or solicitation to buy or sell any security. Consult an independent advisor for personalized guidance and contact BAM Capital for details on current offerings. BAM Capital and its representatives are not fiduciaries or investment advisors. The information provided is general and may not reflect individual financial goals. Any financial terms, projections, or forward-looking statements contained herein are hypothetical in nature and should not be interpreted as guarantees of future performance or safety. Such statements reflect BAM Capital’s opinion and are subject to market fluctuations, economic conditions, and investment risks. Past performance does not predict future results. BAM Capital and its affiliates do not guarantee the accuracy or completeness of this information. BAM Capital offers investment opportunities under Rule 506(c) of Regulation D exclusively for accredited investors as defined by the SEC. Verification of accredited investor status is required prior to participating in any investment.

© 2025 BAM Capital. All rights reserved.

SOURCES:

[1]: Forbes. (2024). “7 Best Safe Investments Of December 2024.” https://www.forbes.com/advisor/investing/best-safe-investments/

[2]: WallStreetMojo. (2023). “Low Risk Investments.” https://www.wallstreetmojo.com/low-risk-investments/

[3]: Investopedia. (2024). “What Is a High-Yield Savings Account?” https://www.investopedia.com/articles/pf/09/high-yield-savings-account.asp

[4]: Investopedia. (2023). “Treasury Bond: Overview of U.S. Backed Debt Securities.” https://www.investopedia.com/terms/t/treasurybond.asp

[5]: Investopedia. (2024). “Corporate Bonds: Definition and How They’re Bought and Sold.” https://www.investopedia.com/terms/c/corporatebond.asp

[6]: QC Capital Group. (n.d.). “Ultimate Guide To Multifamily Real Estate Syndication.” https://qccapitalgroup.com/ultimate-guide-to-multifamily-real-estate-syndication/

[7]: BAM Capital. (n.d.). “Current Portfolio.” https://capital.thebamcompanies.com