The Best Safe Assets To Park Pension Funds For The Senior Citizens

By Author: Nathan Brown
Total Articles: 25
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A country's strength in the international arena is determined by the strength of its economy and its ability to create assets for the comforts of its citizens. The principal assets of a country are the infrastructures and that determines the country's ability to move further in a globally competitive world. Creating and maintain the infrastructure is a massive effort that never comes to an end. In fact no country by any stretch of imagination can be classified as fully developed and there is always something to be developed and the older ones need to be maintained.

Building new airports, railroads, telecommunication facilities, roads, seaports, defense equipment factories and more come under the category of infrastructure. Unlike small businesses or even mid-size businesses returns on investments made in infrastructure projects are usually late to come, but then they are also the safest and are generally considered as low-risk investments. The returns are minimal and are generally not so popular with investors who expect a higher rate of return. So it is normal for governments to make investments in infrastructure projects ...
... with funds from insurance companies and pension funds operated by government agencies.

The telecommunication industry in particular is worthy of special consideration due to the multiplying effect they have on the economy as a whole. Without them nothing can move further, and on the periphery is the entertainment sectors that are closely related to telecommunication and those include internet and TV services. The massive investments made in the past are beginning to show results, and that can partly be attributed to technological innovations. Years before it the telecommunication was a vastly segregated service with the internet, telephone and cable TV/satellite TV services coming from different sources. But today, the three services are often provided by a single entity that can be used for phone, internet and cable as well. As a result of the numerous entrants in the fields pricing and quality has become extremely competitive. So it is common to see price competition in deals for the customers like the Verizon FiOS deals for example.

Another sector that is significantly low-risk is the utilities sector. Mostly banking, electricity and water supply companies. And that is because, for most part they are statutorily regulated in the interest of national security. Since projects from these sectors take a long time to gestate, it is usually for the government to provide some form of assurance regarding the payment of interest and capital to the investors, making them very safe for senior citizens and pension funds. The usually way for the government to mop up funds for these projects is through the issuance of bonds, and some kind of a guarantee for repayment of interest and the capital. The maturity period is generally long and may even extend beyond 15 years in some case, and is often preferred by those who are averse to risk taking.

The financial health of a country is generally in the hands of the apex bank that controls the monetary policies of the country. Taking money out of circulation in the economy or infusing fresh funds are decisions left to them by the government. And one of the ways in which the apex bank of a country reduces money circulation is to issue bonds at low rates of interest for its citizens with tax incentives in some case. A more severe form of regulation is to impound some part of the funds with the banks through a system of bond regulation. They are generally of very low-risk due to guarantees that are inherent to them. If you are one of those who have enough funds, don't like risk and are willing to keep your money locked for extended periods, then low-risk investment in government guaranteed bonds is the answer.