Personal Resource Center

Investing if you are risk averse

Fearing the loss of your money is reasonable, but investing can be a critical if you want to build wealth. Here's how the risk-averse can get started.

Investment strategies for the Risk Averse

If you are a risk-averse investor, here are a few things you should not do.

  • Build an aggressive investment portfolio allocation. Having less exposure to equities and more to investment-grade bonds may be a good choice for you.
  • Maintain very concentrated positions. Diversifying your portfolio may help spread risk so that your future wealth is not tied to the fate of a single (or even a few) specific stocks or assets.
  • Try to time the market or predict when the value of securities like stocks and bonds will rise and fall. Even 90% of professional money managers fail to successfully time the market!3

In addition to avoiding these very large risks, there are ways you can minimize the chance of loss or failure to meet your investment goals, even if you can't eliminate the possibility entirety.

How to manage longevity risk

Longevity risk is the risk of outliving your assets, which is why you should invest early and often. One downside of following a risk-averse investment strategy is that you have to expect lower returns. The market isn't going to do the heavy lifting for you. Knowing that, consider saving more aggressively to account for investing conservatively.

General market risks

General market risk refers to the possibility of losses due to overall market performance. That's why all investments, even "safe" ones, carry some degree of risk even if small. To smooth out general market risks, you can follow a dollar cost averaging approach. With dollar cost averaging, you make predetermined contributions to your portfolio on a periodic, predetermined cadence — so you're not tempted by market timing, and you consistently buy into the market regardless of short-term performance or events.

Investment options for the Risk Averse

Once you're feeling ready to jump into the market with a risk-averse investment strategy, the next question is this: Where do you put your money? You want to invest in vehicles that provide the opportunity to earn returns without putting too much on the line.

While there are no guaranteed or perfectly safe investments, there are some low-risk options you can consider, including:

  • Mutual funds or Exchange Traded Funds (ETFs) that track broad market indices to gain equity exposure in a low-cost, diversified way
  • Individual investment-grade bonds or bond funds
  • Treasury inflation-protected securities (TIPS)
  • Money market funds

Don't go it alone

The best advice for how to invest if you're risk averse? Consider having a trusted professional at your side to guide you, so you don't need to muddle through the options on your own.

A good financial advisor will be able to build a portfolio that is designed to align with both the risks you're willing to take and your personal goals for building wealth. Then they can help you determine what investment risks are worthwhile and which are not appropriate for you.

Talk to a Synovus financial advisor today to help you get started.


Diversification does not ensure against loss.

Important disclosure information

  1. "What Is The Average Return Of The Stock Market?," Kent Thune, Seeking Alpha, Accessed June 2, 2022. Back
  2. S&P 500 Historical Annual Returns, MacroTrends.net, Accessed June 2, 2022. Back
  3. "Most investment pros can't beat the stock market, so why do everyday investors think they can win?" Eric Rosenberg, Business Insider, Accessed June 7, 2022. Back