High Yield Safe Investments:

Today, many investors are looking for quick and high yield safe investments tools. If you are looking for a high yield safe investment plan, then you can consider investing in convertible bonds or stock options:

Convertible bonds, which are also called known as CBs or convertibles, are bonds that the owner of the bond can convert into predetermined sum of the company’s equity at a given point in time during its life. Convertible bonds are very attractive, safe and high yield safe investments option that you can consider due to the following reasons:

• Convertible bonds are one of the high yield safe investments option because it offers you with interest payments on regular basis.
• Downtrend in this investment category has not been as volatile as in other investment options, even in the recent economic meltdown.
• Another reason why CBs are a high yield safe investments tool for you is that, if the value of your underlying stock increases, you can convert your bond holdings into stock and play your part in the growth of the company. As the price of the stock increases, the price of the CB will follow up and climb as well, resulting in a high yield return even if you sell the CB directly without converting it into stocks.
• The main benefit of CB over regular stocks is that you have a “floor” that protects you against sharp declines in the stock price. If the value of your underlying stock declines, the minimum value of your investment will be same as the value of high yield bond.  The value of CB is derived from the value of the underlying stock.  Thus, investing in CB is a high yield safe investments option, since the risk involved here is comparatively lesser than investing in common stocks.

Investing in stock options is another high yield safe investments option that you can consider as this option has many advantages, but carries also a serious warning sign along it, which are listed below:

• Investing in stock option is a high yield safe investments option since it provides you higher returns than returns on stocks. Even a slight move in the stock can give you significant return on your option. You can even double your investment in a day by investing in stock option.
• Stock movements are amplified with options. If a stock moves by up to 10% your stock option can move up drastically by up to hundreds of percentage point. This is because they are vey highly leveraged and even a small move would mean a big move for you.
• With options you can reap benefits of all market directions. While call options make money when the value of stock increases, put options makes money when the value of the stock decrease. It is this feature of the stock option that makes it a very attractive and high yield safe investment.
• Another advantage of investing in stock option is that it can be bought and sold easily. This allows you to quickly judge what the prospects of the stock ahead are. Thus, you can decide before hand whether to buy the stock or not.
• Stock option is a high yield investment tool which is still a safe investment simply due to the fact that since you have the leverage over the stock, that you do not have to risk all your money in stock, but place only a small portion of it in stock options and keep the rest in a highly secure asset, such as TIPS or a very solid bond. In this case, even if the market declines and the stock options will be completely “out of the money”, then you will still be able to reap the interest from the solid investment for the major portion of the investment.
• One important warning that comes with stock options is that the safe investor must not buy an excess dose of this tool as he will then become a speculator and not an investor. Many investors dealing with stock options become tempted with the high and quick gains that come with this instrument, and tend to invest larger sums of money in it, and when the market fluctuates they see their investment simply erased in a matter of days.