Everyone thinks any investment should be very risky, but contrary to that, I think ignorance is more risky. Yeah, there’s always a margin of risk in investment…such risk could be bigger in some investments than others depending on the industry among other factors. But being ignorant in the due process of investing even increases your risk of a loss more than ever! Just a few days ago, I was in a random discussion with some folks when one of them said that there’s no investment vehicle that is risk free until I told him about Treasury bills and treasury bonds. Thought I’d share it here too.
Treasury Bills (T. Bills) are risk free short term financial instruments for investment. regularly issued to the public by the government. T. Bills are usually issued with maturities of 91 days, 182 days, and 364 days. Principle and interest are paid at maturity.
Treasury Bonds (T. Bonds) on the other hand are long term financial instruments for investment regularly issued to the public by the government with maturities of 2, 3, 5 and 10 years. Interest on securities is paid semiannually and the principle is paid at maturity!
Such investment instruments are risk free and the investor is guaranteed to receive interest and principle at the end of it all!
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