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Here we list some of the best investment ideas and tackle the challenge of finding the most effective safe investments for 2012. What might appear to be one of the best investment tips to the uninformed could turn out to be among the worst group of companies.

Taking a look at the big picture for investment ideas in 2012, moderation in asset allocation and a balanced investment portfolio could be the most basic key to success. There are 4 asset classes, and average investors need certainly to spread their money across at the very least the very first three to help keep their overall portfolio risk moderate. The 4 categories in asset allocation are: safe investments, bonds, stocks and alternative investments like gold and property (optional). Asset allocation may be simplified, since there are mutual funds open to average investors that represent all the 4 asset classes. Now let's have more specific about the most effective investment ideas for 2012 beginning with safe investments.

Safe investments earn interest and do not fluctuate in price. You will have to look outside of mutual funds in 2012 to find the best safe investments because record low interest rates have taken yields on money market securities (and hence money market funds) down seriously to more or less zero. One of the best investment ideas when you have an account with a discount broker or major mutual fund company would be to look for one-year CDs paying higher rates if you can't get competitive rates from the local bank. Don't tie your money up for longer periods simply to earn a bit more interest. One of these days interest rates should go back up and you is going to be locked in at less rate and face penalty charges if you money in early.

Finding the most effective safe investments is going to be truly challenging in 2012, but below are a few more investment ideas. If you're in a retirement plan just like a 401k that's a fixed or stable account option do not overlook it. You can often get a much higher interest rate there (maybe 4% to 5%) than somewhere else outside of one's retirement plan. If you possess an older retirement annuity or universal life insurance policy, it could have a fixed account you can add money to that is guaranteed to prevent pay less than 3% or 4%. Remember, truly safe investments like U.S. Treasury bills and bank money market and savings accounts are paying WAY LESS than 1%!

Within the last 30 years bonds and bond funds have become a popular with investors because they've been consistent performers and returned on average about 10% per year... basically about equal from what stocks have returned, but with even less risk. Many investors have fallen in love with their bonds funds and consider them to be on the list of world's best safe investments. Bond funds are NOT safe investments. They've performed well since 1981 (when interest rates and inflation were at record highs) for one primary reason. Both inflation and interest rates have now been falling for 30 years, which includes sent bond prices higher. Loading up on bond funds now's NOT one of the best investment ideas for 2012. In fact, it's among the worst investment ideas.

When interest rates and/or inflation turn around and head upward bond funds, especially the ones that hold long-term bond issues, is going to be losers. That's how bonds work. One of the very best investment ideas for 2012 is to sell your long-term bond funds if you possess any, and switch to funds holding bonds with average maturities of about five years. They're called intermediate-term bond funds; and average investors needs to have some cash invested here as part of their asset allocation strategy to include balance to their investment portfolio. They're not truly safe investments, but they are much safer than long-term funds.

My best investment ideas in the stock department give attention to stock funds. Don't go heavily to the more aggressive funds that invest primarily in growth and/or small company stocks. These pay little if anything in dividend income and tend to be more risky and volatile than the common stock fund. Choose funds that invest in high quality large-company stocks with excellent dividend paying histories. Look for funds that are paying 2% or even more in dividends. One of the best investment ideas for 2012 and beyond: invest in no-load funds with low yearly expenses. No-load means no sales charges, and low expenses mean higher net returns to the investorgroup of companies.

Alternative investments include famous brands property, gold and other precious metals, natural resources, commodities, foreign investments and so on. One of the best investment ideas for managing a truly balanced investment portfolio is to add this fourth asset class as well. The simplest means for the common investor to include these alternatives to their portfolio has been mutual funds that specialize in these areas or sectors. My best investment ideas here: don't go heavily into anyone area, and don't chase after having a sector (like gold) just because it's hot. Real estate and natural resources funds would be my picks as two of the best investment ideas in the choice investments asset class.

Moderation and diversification across the asset classes could be the key to asset allocation in 2012. I also have listed some specific best investment ideas for keeping the common investor in the overall game and out of serious trouble should the investment scene turn ugly. Above all else memorize this: long-term bond funds aren't the best safe investments for 2012. They are not safe investments, period.

Author James Leitz teaches investment basics, stocks, bonds, mutual funds and how to invest in his investing guide for novices called INVEST INFORMED. Put Jim's 40 years of investing experience to do the job and get up to date atgroup of companies.