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Low Risk and High Returns for investments

Between property investment and stock investment, which one is low risk and high returns? Low risk could be both, actually. There are certainly safe stocks to buy. For example, the blue-chip counters. However, high returns? Does it apply to property investment? Let’s look at the definition for both low risk and high rick as a start.

Investopedia says this about lowrisk investment.

Low-Risk Investment

By nature, with low-risk investing, there is less at stake—either in terms of the amount of invested or the significance of the investment to the portfolio. There is also less to gain—either in terms of the potential return or the potential benefit bigger term.

Investopedia says this about high-risk investment.

High-Risk Investment

A high-risk investment is one for which there is either a large percentage chance of loss of capital or under-performance—or a relatively high chance of a devastating loss.

What is investment to me?

Personally, I define investment as something which I could UNDERSTAND why I could get the returns. If it’s something which I do not understand, then it’s just a purchase with potential returns. For unit trust, I am able to know the stocks which the fund manager is buying into. I may not know the companies enough but I guess I have to trust the fund manager. I know that when these stocks do well, then my fund does well and I will get good returns. When these stocks fare badly, then I suffer losses. Simple enough?

What about buying into companies through the stock market?

If it’s a share of a company listed in BURSA, then I must understand what the business is about! For example, we buy a hotel stock, then please drop by that hotel and see if it’s fully booked. If we buy into a car company, then start looking at car sales charts, are they selling ever more cars or fewer cars? However, if we are buying into a company which business model is something we are not familiar, then it’s no longer investing yeah. It’s called speculating. This is why even the stock market can be an investment or a gamble, depending on how we do it.

What is a property investment then?

If it’s property investment, then it’s a save-enough-downpayment and qualify for a bank loan kind. Property investment has nothing to do with any get-rich-quick scheme. Buy this year, sell for big profits next year for example. Anyone trying to sell you a property and tell you that the price sure go up next year is most probably going to run away with your money. Alternatively, buying to get lots of money back is foolish because those are your money actually… The only reason we could get cheated is because we were greedy.

Property investment is fine even in smaller towns

My parents bought their first property in Teluk Intan for RM35,000. That was in the 80s. The same house is now priced 10 times higher. They bought their second property in Ipoh for RM85,000. That was in the 90s. It is now RM540,000. Over a long period of time, due to effects of inflation (money getting smaller in ALL countries) and salary amount going higher, the property prices will just follow. This is more apparent for properties in bigger cities in Malaysia.

So, to all the personal finance people out there who does not understand about property investment and does not even own any property, please do study about it a little more. There is really no need to keep misleading people that property investment is low risk and low returns because it is not. As for the advice about buying a certain stock, if I am 100 percent sure about that particular stock, then I will keep those secrets to myself. Cheers.

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Next suggested article: Home for own stay is not an investment?

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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