How to Invest If You Can't Afford to Lose

Investing your money allows you to grow your nest egg until it's time for retirement. When you invest from a young age, it doesn't matter much if you lose money in the short-term, as you'll be able to make up for that lost money long term. However, if retirement is approaching, you are not able to make the same risky investments. Take a conservative approach to invest when you can't afford to lose the money you put in.

Select a brokerage. There are two main types of brokerage firms that you can choose from--full service and discount. A full service firm will actively manage your portfolio, helping you to protect your investments, but it comes with high managing fees. Discount brokerages have lower costs, but don't offer the same types of portfolio management. You'll have to handle your own investments. Decide which type is best for you and find a brokerage that you can trust.

Choose conservative investments. Stocks can be risky investments and you can lose your money quickly. If you want to protect your investment funds, stick with more conservative investments, such as bonds and mutual funds.

Diversify your portfolio. If you put all of your money into one investment, you stand a chance of losing that money should the investment turn bad. It's best to spread your money around to different places. Mutual funds do this automatically in that they pool investors' money in order to purchase stock from a number of different companies. You'll also want to diversify the mutual funds that you invest in--chose several that look good.

Research companies or mutual funds before you invest. Compare your investment choices. While past performance never guarantees future performance, you should look for investments that have steadily increased over time, with only short dips and peaks. These are a safer bet than investment with large increases and decreases.

Invest for the long-term. If you're going to need the money in a few months, you'll be better off keeping it in a savings account. The money that you put into your investment accounts should stay there for several years.


  • Avoid day trading. Day trading--actively buying and selling on a daily basis--is a risky investment strategy and often involves high account fees. If you want safe investments, this isn't the right technique for you as you could lose a lot of money.