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Goal is to minimize risk and increase investment returns. Any recommendations?

You really need to define risk for yourself, and your time frame. If you're investing for a decently long haul, and can teach yourself to ignore some volatility, then as far as producing long term returns, stock funds have actually consistently and reliability produced superior returns, which over the long haul may be considered 'less risky', even if you have to deal with some ups and downs. It's all a matter of attitude.

You may want to read the Coffeehouse Investor, which is a relatively conservative strategy and may give you a good perspective on some things. You don't have to take their advice word for word, but it might give you a starting point and customize it for yourself.


As far as increasing returns, there's little you can do without adding risk. However, you can pick some investments that will help diversify, so you're not so very dependant on bonds, which is it's own kind of risk - i.e. in this rising rate environment, your bond funds are not going to be pleasing you.

For some suggestions for relatively conservative investment that you can use to diversify, I'm thinking of other income producing things - dividend paying, relatively stable stocks (or, probably funds thereof), REIT (real estate investment trust) funds, perhaps some money in precious metals (by which I mean stocks of mining companies, etc, or funds thereof, you probably don't want to get involve in futures of the actual metals). All of which can lose definite value, and none of which should probably be much more than 10% of your portfolio (alright, the dividend stocks could be a bit more).

But if, say, REITS, are 10% of your portfolio, and they lose 20% of their value, you've only lost two. And by having a variety of asset classes, it is very unlikely that they will move together, so some up and some down which help keep your portfolio more stable. And all those, especially REITs, pay some very nice dividends which helps with the stability factor.

It's early in the morning for me :-), so I'm just thinking outloud, but hopefully this has given you some options.
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