Is there any 100% risk-free investment available?

I often write answers on Quora, where I am the most viewed writer for investing, wealth and personal finance, with over 230 million views in the last few years.

On the answers below, taken from my online Quora answers, I focus on a range of topics including:

  • Is there any 100% risk-free investment available?
  • Will the stock market skyrocket after Covid ends, as most people think, or could we have a surprise in store?
  • What is the most scientific approach to making a profit in the stock market?
  • Why do Mainland Chinese investors prefer to invest in real estate over stocks, or is it more complicated than that? I speak about my experience in the local market.

If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me, email ( or use the WhatsApp function below.

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Is there any %100 risk-free investment available?

Source: Quora

Unfortunately, not, but I will tell you a way which has had a perfect record in the past of not losing money later on.

There are two main reasons why this is the case:

  1. The past isn’t an indication of the future in any situations. There are some investment strategies that have had an 100% long-term success rate (more on that later), but that doesn’t mean it will definitely be 100% in the future. Let’s put it this way, if there is a nuclear war or any number of other unprecedented events, everything will be valued at zero!
  2. There are many different kinds of risks including yourself – in other words your own behaviour and impulses

For example, cash in the bank isn’t low risk. Not even close to zero risk.

Sure, you will, almost for sure, get back the nominal amount in your hand.

Yet you face inflation and currency depreciation risk. In fact, you now have a close to guaranteed chance of losing money to inflation.

If your bank is paying 0.1% and the inflation rate is 2%-3% per year, that is a 25%-36% loss to inflation over ten years, and you could lose more than 75% of the money over a 25 year period, because it all compounds.

Even if the rate is above the inflation rate, you can lose to currency depreciation.

This especially affects people like expats who live in one country but earn in another.

I have lost count of the number of British and South African expats who have suffered in the last decade due to this issue.

Real estate isn’t zero risk due to leverage and also most people don ’t have enough money to diversify into hundreds of houses in tens of locations globally.

That means you have various risks associated with owning one to six homes.

Likewise, stocks aren’t zero risk either. Now sure, the stock market has always gone up nearly every country long-term, as per the graph below:

Yet you face the following main risk…….yourself. 100% of people who have bought and held 3–4 ETFs long-term and reinvested the dividends for decades have made much more money than inflation.

Yet 100% of people have made money in the stock markets? Why?

Well, they pick individual shares, which can work in some cases but is riskier, and especially get emotional and panic sell during crisis.

Others don’t panic sell but lose heart if the markets are stagnant for say ten years. This is the biggest risk that people don’t factor in.

The lowest risk way to invest is:

  • Invest in 3–4 ETFs, especially if you aren’t a finance professional. Have International and local exposure + a bond market index
  • Reinvest the dividends every year
  • Be ultra long-term, by which I mean forever.
  • Add monthly or at regular intervals
  • Rebalance from the winners to the losers. For example, when stocks crashed briefly in 2020, selling some bonds to buy stocks would have made sense, and vice versa when stocks are soaring.
  • Just keep to the plan no matter what. Don’t listen to media reports and so on.

That is the best risk-adjusted strategy long-term, but few can seem to keep to it, even though things are improving due to education online.

The bottom line is life is about risk, and doing nothing is usually riskier than doing something.

Doing the above dramatically decreases your risks provided you can keep it up long-term.

What is the most scientific approach to making a profit in the stock market?

Source: Quora

Stocks aren’t an exact science like chemistry is. With that being said, there has been a lot of research which has been done.

This research has looked at things like historical correlations, which aren’t a definite guide to the future, and many other variables.

The keys to long-term success are fairly boring.

They include

  1. Investing now, literally today, if you have money. Don’t time the markets
  2. Invest at regular intervals after investing today. That could be monthly or once a year. If you do 1+2 you will have some good and bad years, and periods, but long-term you will be fine
  3. Reinvest dividends. It is one of the keys to investing properly. Look at the UK stock market as one example:

4. Be diversified. Own at least 3–4 ETFs across various markets. This doesn’t mean being overly diversified but having access to bond stocks and bonds can allow you to limit your risk. Access to bonds should increase with age.

5. Buy, hold and forget or buy, hold and rebalance from the good to the badly performing stuff.

6. Don’t speculate or panic when markets are falling

7. Invest for as long as possible. It reduces your risk as per the graph below, and increases your likely gains due to compounding:

8. Don’t listen to the media every time there is a crisis. This is one of the biggest reasons people make some of the mistakes above. During the Covid crisis, and 2008–2009, the majority of do it yourself (DIY) investors either panic sold or didn’t panic, but had a “wait and see approach” and didn’t add fresh money.

9. Read a lot and DIY, or use somebody who knows what they are doing. Plenty of people DIY invest and just base decisions on emotions and not reading.

10. Have the rest of your finances sorted out as well, like spending habits, emergency money etc. This limits the risks that you will need to sell some of your portfolio if you lose your job, and increases how much money you can invest in the first place. Remember, the biggest indictors of how much you will have at retirement is how much you can afford to invest and for how long, not percentage returns.

A simple, boring, approach can be very effective long-term, even if there will be some folks in the road.

Why would the Chinese rather invest in real estate instead of the stock market?

Source: Quora

Well, the recent experience has been unlike most other places because:

  • The real estate market has skyrocketed
  • The stock market has been one of the worst performing ones in the world since 2006:

With that being said, things go in cycles. I know plenty of people who lived in China in the 1990s and early-mid 2000s.

At that time, there was plenty of enthusiasm for local stocks, and the market skyrocketed.

In more recent times we saw a huge uptick in 2015 and some people have became interested again recently now the market is cheap, and real estate prices are out of reach to most people without parental help.

Many wealthy Chinese people I have met also have allocations to Hong Kong, US and International stocks.

When I started out in the international finance industry in Shanghai, many Chinese clients were looking for International real estate and stocks as a diversification tool.

So, what is true is that few local people are as interested in local stocks as international ones and real estate.

Yet it isn’t true that people aren’t interested in any stocks, and I fully expect mania to return to the local market as well.

One of the issues in China as well is that the market is dominated by smaller players.

Whereas 80%-90% of the S&P500 is dominated by institutions, Shenzhen and Shanghai still is influenced by smaller individual investor.

That means the market is driven by emotions, to a greater degree than Hong Kong or the US markets.

Over time, I expect to see more institutional investors going into the Chinese markets, which should reduce some of these extreme moves, where the market can double or halve within a few years.

Even when I look at my own network of Chinese associates, I have noticed that plenty will go through trends of preferring local real estate, then international real estate and then stocks.

So these things aren’t set in stone forever, even though it is true that there is a cultural obsession with property.

Will the stock market skyrocket after the Covid pandemic is over?

Source: Quora

Maybe, and even most probably, but not necessarily.

Look at the trends recently:

  • The pandemic was known to the world in January/February 2020. It started earlier, but media coverage started then. Many stock markets hit record highs in late January/early February
  • Stocks crashed in late February/March last year after the first lockdown was announced
  • They came back in a big way for much of the year, occasionally going down, like in October. Record highs were regularly hit. It happened first to the tech-heavy Nasdaq but happened to all markets
  • Stocks skyrocketed in November 2020, even before the vaccine was announced. This is despite an unclear US election result, which resulted in days of uncertainty, a dispute which lasted weeks surrounding the election and a second European lockdown. The media had been claiming for months that the election could affect stocks, just as they had claimed falsely in 2016.
  • Stocks skyrocketed again later in November 2020 once the vaccine was announced.

Let’s not forget as well that stocks have fallen, and risen, during wars, pandemics and various other events in the past.

Many stock markets did well during the 1918–1920 period, despite a pandemic and a world war.

Stocks have also fallen hard during great economic periods. 2018 was the worst period for US stocks in a decade, but growth was the highest.

In the same year before the falls, US stocks hit record highs during the worst of the tension with North Korea and a limited trade war with China.

All of this shows that we can expect the unexpected. Stocks could skyrocket after COVID-19, be stagnant or fall.

What we know is that stocks are likely to skyrocket long-term, as they always have:

Not all stocks, but the general market like the S&P500. The key therefore is to be patient and not care about the short-term.

You might have seen yesterday that the Japanese Nikkei market in Tokyo is back up to 30,000 again.

It is the only major market which is down on a 30–35 year timescale, yet an investor who has reinvested dividends in the meantime has actually banked a reasonable profit.

There is an important lesson there, that even the worst performing major stock market in the world has produced a profit if dividends had been reinvested.

Somebody who was a third in Japan, a third in international stocks and a third in bonds for the last 35 years would have made a killing.

So diversification + dividend reinvestment + patience = a great chance of long-term success.

Further Reading

On the answers below I focused on:

  • Who gets your stocks, ETFs and other assets when you die? 
  • Is Revolut a good solution for buying stocks or is it better as an alternative to the traditional banks?
  • Will there be new ways to get rich, or wealthy, in the 2020s, or will existing trends just accelerate?
  • Will Coronavirus result in a huge work-from-home trend, or will things return to “normal” soon once the vaccine has been administered globally? 
  • How much of your savings should you put into the stock market? I discuss some rules of thumb and basic asset allocation strategies.

To read more click below:

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Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 230 million answers views on and a widely sold book on Amazon.

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