Low risk hybrid investment strategy
I recall similar strategies when (in the US) interest rates were quite a bit higher than now. The investment company put 75% or so into into a 5 year guaranteed bond, the rest was placed in stock index options. In effect, one had a guaranteed return (less inflation, of course) of principal, and a chance for some market gains especially if it went a lot higher over the next 5 years.  The concept is sound if executed correctly. I think you may be confused on terminology here. Financial leverage is debt that you have taken on, in order to invest. It increases your returns, because it allows you to invest with more money than what you actually own.  Example: If a $1,000 mutual fund investment returns $60 [6%], then you could also take on $1,000 of debt at 3% interest, and earn $120 from both mutual fund investments, paying $30 in interest, leaving you with a net $90 [9% of your initial $1,000]. However, if the mutual fund 'takes a nose dive', and loses money, you still need to pay the $30 interest. In this way, using financial leverage actually increases your risk. It may provide higher returns, but you have the risk of losing more than just your initial principle amount. In the example above, imagine if the mutual fund you owned collapsed, and was worth nothing. Now, you would have lost $1,000 from the money you invested in the first place, and you would also still owe $1,000 to the bank. The key take away is that 'no risk' and 'high returns' do not go together. Safe returns right now are hovering around 0% interest rates. If you ever feel you have concocted a mix of options that leaves you with no risk and high returns, check your math again. As an addendum, if instead what you plan on doing is investing, say, 90% of your money in safe(r) money-market type funds, and 10% in the stock market, then this is a good way to reduce your risk. However, it also reduces your returns, as only a small portion of your portfolio will realize the (typically higher) gains of the stock market. Once again, being safer with your investments leads to less return. That is not necessarily a bad thing; in fact investing some part of your portfolio in interest-earning low risk investments is often advised. 99% is basically the same as 100%, however, so you almost don't benefit at all by investing that 1% in the stock market. "There are a number of strategies using options and shares together.  One that sells large potential upside gains to assure more consistent medium returns is to ""write covered calls"".  This fairly conservative and is a reasonable entry point into options for an individual investor. Deeper dive into covered calls"
How I understand it is: supply/demand affect price of stock   negatively/positively, respectively. Correct. Volume is the amount of buying/selling activity in these stocks (more   volume = more fluctuation, right?). Sort of.  Higher volume means higher liquidity.  That is, a stock that is traded more is easier to trade.  It doesn't necessarily mean more fluctuation and in the real world, it often means that these are well-understood stocks with a high amount of analyst coverage.  This tends towards these stocks not being as volatile as smaller stocks with less liquidity. Company revenue (and profit) will help an investor predict company   growth. That is one factor in a stock price.  There are certain stocks that you would buy without them making a profit because their future revenue looks potentially explosive.  However, these stocks are very risky and are bubble-prone. If you're starting out in the share market, it's generally a good idea to invest in index funds (I am not a broker, my advice should not be taken as financial advice).  These funds aggregate risk by holding a lot of different companies.  Also, statistics have shown that over time, buying and holding index funds long term tends to dramatically outperform other investment strategies, particularly for people with low amounts of capital. "You will hear a lot about diversifying your portfolio, which typically means having a good mix of investment types, areas of investments, etc. I'd like to suggest that you should also diversify your sources.  Sad to say but the defined benefit pension is not a rock solid, sure fire source of security in your retirement planning. Companies go bankrupt, government agencies are reorganized, and those hitherto-untouchable assets are destroyed overnight. So, treat your new investment strategy as if you were starting over, and invest accordingly, for example, aggressively for a few years, then progressively safer as you get older. There are other strategies too, depending on factors like your taste for risk: you might prefer to be conservative until you reach some safety threshold to reach ""certain safety"" and then start making riskier investments. You may also consider different investment vehicles and techniques such as index funds, dollar cost averaging, and so on." I want to start investing money, as low risk as possible, but with a percentage growth of at least 4% over 10 - 15 years. ...I do have a mortgage, Then there's your answer.  You get a risk-free return of the interest rate on your mortgage (I'm assuming it's more than 4%).  Every bit you put toward your mortgage reduces the amount of interest you pay by the interest rate, helping you to pay it off faster.   Then, once your mortgage is paid off, you can look at other investments that fit your risk tolerance and return requirements. That said, make sure you have enough emergency savings to reduce cash flow interruptions, and make sure you don't have any other debts to pay. I'm not saying that everyone with a mortgage should pay it off before other investments.  You asked for a low-risk 4% investment, which paying your mortgage would accomplish.  If you want more return (and more risk) then other investments would be appropriate.  Other factors that might change your decision might be: Short time horizon, small pot of money, and low appetite for risk?  That smells like low return situation to me. I guess it depends on how low your appetite for risk is, though.  You could open a brokerage account (free) and purchase $10K worth of a fully diversified ETF like VTI, optionally putting maybe 20% of it in a diversified bond ETF.  I consider that a reasonably conservative investment, but if you are of the mindset that you cannot tolerate a drop in your wealth, it's not going to work.  Plus if you don't have any other investments, this will be the thing that requires you to report capital gains to the IRS, and that paperwork is never fun. As an alternative, you have CD's, which will make you very little.  Or a high-ish interest rate electronic savings account like Capital one 360 or Emigrant Direct (there are probably newer ones now that outcompete even these).  Still, with anything in this paragraph you will be lucky to beat inflation.  The real interest rate was negative last time I checked, so every risk-free investment will lose money in purchasing power terms.  To beat inflation you will need to take on nonnegligible risk. I use two measures to define investment risk: What's the longest period of time over which this investment has had negative returns? What's the worst-case fall in the value of this investment (peak to trough)? I find that the former works best for long-term investments, like retirement. As a concrete example, I have most of my retirement money in equity, since the Sensex has had zero returns over as long as a decade. Since my investment time-frame is longer, equity is risk-free, by this measure. For short-term investments, like money put aside to buy a car next year, the second measure works better. For this purpose, I might choose a debt fund that isn't the safest, and has had a worst-case 8% loss over the past decade. I can afford that loss, putting in more money from my pocket to buy the car, if needed. So, I might choose this fund for this purpose, taking a slight risk to earn higher return. In any case, how much money I need for a car can only be a rough guess, so having 8% less than originally planned may turn out to be enough. Or it may turn out that the entire amount originally planned for is insufficient, in which case a further 8% shortfall may not be a big deal. These two measures I've defined are simple to explain and understand, unlike academic stuff like beta, standard deviation, information ratio or other mumbo-jumbo. And they are simple to apply to a practical problem, as I've illustrated with the two examples above. On the other hand, if someone tells me that the standard deviation of a mutual fund is 15%, I'll have no idea what that means, or how to apply that to my financial situation. All this suffers from the problem of being limited to historical data, and the future may not be like the past. But that affects any risk statistic, and you can't do better unless you have a time machine. "I think Swenson's insight was that the traditional recommendation of 60% stocks plus 40% bonds has two serious flaws: 1) You are exposed to way too much risk by having a portfolio that is so strongly tied to US equities (especially in the way it has historically been recommend). 2) You have too little reward by investing so much of your portfolio in bonds. If you can mix a decent number of asset classes that all have equity-like returns, and those asset classes have a low correlation with each other, then you can achieve equity-like returns without the equity-like risk. This improvement can be explicitly measured in the Sharpe ratio of you portfolio. (The Vanguard Risk Factor looks pretty squishy and lame to me.) The book the ""The Ivy Portfolio"" does a great job at covering the Swenson model and explains how to reasonably replicate it yourself using low fee ETFs." "The standard low-risk/gain very-short-term parking spot these days tends to be a money market account.  However, you have only mentioned stock. For good balance, your portfolio should consider the bond market too. Consider adding a bond index fund to diversify the basic mix, taking up much of that 40%. This will also help stabilize your risk since bonds tend to move opposite stocks (prperhaps just because everyone else is also using them as the main alternative, though there are theoretical arguments why this should be so.) Eventually you may want to add a small amount of REIT fund to be mix, but that's back on the higher risk side. (By the way: Trying to guess when the next correction will occur is usually not a winning strategy; guesses tend to go wrong as often as they go right, even for pros. Rather than attempting to ""time the market"", pick a strategic mix of investments and rebalance periodically to maintain those ratios. There has been debate here about ""dollar-cost averaging"" -- see other answers -- but that idea may argue for investing and rebalancing in more small chunks rather than a few large ones. I generally actively rebalance once a year or so, and between those times let maintainng the balance suggest which fund(s) new money should go into -- minimal effort and it has worked quite well enough.,)" I'm not in the industry, but the point of the quoted section suggests that hybrid debt (instruments with both debt and equity features) count as acceptable capital against upcoming required capital positions.   These instruments are going to be cheaper than using common equity, and provide a leverage effect that can improve the return on equity (same income/cash flow over lower required equity).