There are plenty of ways to invest. At the end of the day, investors are looking to balance risks versus rewards.
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 | | One Unique Low-Risk, Moderate Return Strategy |  | There are plenty of ways to invest. At the end of the day, investors are looking to balance risks versus rewards.
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Government bonds have nearly no risk—or at least according to financial academics. Compared to an asset like bitcoin, that's certainly true. But these two asset classes also offer investors very different potential rewards!
But there's one strategy that offers low risk, but also a potentially market-beating return over the course of the year. It's a strategy based on the price if a company after it's received a buyout offer from another company.
That's because the market may not always believe that a merger is going to go through for one reason or another. Until a merger offer is completed, there's usually a difference in price. Investors who buy shares on expectation of the offer being completed are engaging in a practice of "merger arbitrage."
This kind of arbitrage offers relatively low returns—usually in the 5-10 percent range. But it has a high likelihood of paying out in the space of a few months. A few of these trades per year can create market-beating returns over time.
With the stock market near all-time highs, and with companies sitting on cash looking for ways to deploy that, we'll likely continue to see a robust volume of mergers. That means there are plenty of potential opportunities to use this strategy in the coming months.
Best of all, because these trades are relatively short-term, it means taking profits quickly and avoiding a potential selloff in the overall market.
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