There is no such thing as a risk-free investment. Not government bills, not bank deposits, not products with “guaranteed” in the name. What the traditional financial system sells as safe is not that safe, and what it sells as risky is a good deal less so. It depends on how you measure risk.
What risk is
Think of your home. If flats in your area drop 20% one year, you have lost nothing as long as you keep living in it and do not sell. If it burns down, you have. Investments work the same way: a price going up and down is not risk. Risk is losing what you put in for good: the company goes bust, the debtor does not pay, the currency you save in buys less every year.
And risk is not measured on its own. It is measured against what you can gain. An investment that at best gives you little and at worst takes everything is dangerous, even if it almost never fails. One whose price moves a lot, but where losing everything is almost impossible and the upside has no ceiling, is safer than it looks.
Accounts and deposits
Picture 10,000 euros in the bank. A year goes by and it is still 10,000. The bank has not failed, nobody has charged you anything, and yet you are poorer. In September 2026 prices in Spain were 4.9% higher than a year earlier: your 10,000 euros buy what 9,532.89 used to. You have lost 467.11 euros of purchasing power without touching anything.
Deposit guarantee schemes, 100,000 euros per person and per bank across the European Union, pay you back if the bank fails. They protect you from the bank failing, not from the euro losing purchasing power. And that loss is no accident: the euro, like every fiat currency, can be issued without any physical limit, and the more euros there are, the less each one buys. We explain it in What inflation is and why it happens.
A deposit guarantees you one thing: losing purchasing power at a known rate.
Government bills and bonds: little to gain, everything to lose
Buying a bill or a bond means lending money to a government, or a company, in exchange for fixed interest. It is like lending 100 euros to an acquaintance who promises to give you back 103 in a year. If all goes well, you make 3 euros. If he does not pay, you lose 100. The most you can make is written down from day one; the most you can lose is too, and it is everything.
Spain's 12-month bill came out at an average yield of 2.999% at the auction of 6 October 2026. With prices rising 4.9%, that is a loss of 1.8% of purchasing power a year. And that is the best case: that they pay you.
In the worst case, they do not. Government bonds are presented as “risk-free”, and that is false. In March 2012 the private holders of Greek bonds, a euro-area country, took a 53.5% cut to the face value: for every 100 euros lent they got new securities worth 46.5. Nor is it a Greek vice. The Spanish monarchy of Philip II, the great power of its day, stopped paying its bankers four times between 1557 and 1597.
We are not saying any government will default tomorrow. We are saying that, set against what it offers, the risk is huge: you stake your whole capital for interest that barely matches inflation, if that. That is why our portfolio holds no government debt of any kind. Parking money you will need in a few months can make sense; as a long-term investment, it does not.
Capital-guaranteed products have the same problem: they guarantee the same euros you put in, not what those euros bought. Ten years later you have lost nothing on paper and lost part of it at the supermarket. And the guarantee is paid for, in fees or in lower returns.
What gets sold as risky
Shares in good companies. A share is a piece of a real business, with customers, factories and profits. Its price moves a lot: in 2008 the S&P 500, the index of the 500 largest US companies, fell 37.0% including dividends. Whoever did not sell got it back over the years. Whoever sold turned a temporary fall into a permanent loss.
Now set what you can lose against what you can gain. To lose everything you put into a company like Google, Google would have to disappear, and it is hard to imagine it not still being around in fifty years. How much its profits, and with them its price, can grow has no ceiling. It is the opposite of a bond: total loss almost impossible, upside without limit. And if instead of one company you buy five hundred with an index fund or an ETF, all five hundred would have to go bust for you to lose everything.
A single company can go bust, and that is a permanent loss. The risk of shares is not removed, it is narrowed: by picking businesses whose product is clearly better than the competition, or by owning many companies at once.
Gold. It is real money: nobody can create it from an office, it has no debts and no board of directors, and it cannot go bust. Its price swings, sometimes a lot, but its existence is not in question. The Spanish minimum wage bought 17.75 grams of gold a month in 2020 and 10.12 in August 2026.
When someone was sold something as safe
In Spain, Fórum Filatélico and Afinsa sold stamps as an investment. Customers bought a lot and the company promised to buy it back with a guaranteed return of between 7% and 10% from 1998 to 2002. The price of the stamps did not affect them. A fixed, high return with no surprises: exactly what anyone searching for “safe investments” wants.
In May 2006 Spain’s National Court took control of both companies. According to the prosecutors, the interest paid to some customers came from the money brought in by new ones, not from what the stamps were worth. Around 350,000 people were affected.
Faced with a fixed return, the question is not how much they pay, but what happens if whoever promises it cannot pay. With stamps, with a bank or with a government, the answer is the same.
So which is the safest?
A portfolio of real assets, good companies and gold, held for many years without being forced to sell.
Whatever you will need within a year or two is not invested: it stays in the bank, and there you accept losing purchasing power knowingly, because that is the price of never having to sell at a bad moment. That is what turns a market fall into a mere fall in price and not a loss.
The rest goes into real assets for the long term, the same amount every month, whatever happens. And the hardest part: not selling when everything falls. The risk that costs the most money is not in any product, it is in selling in a panic.
If you are starting from scratch, the steps in order are in Start investing from scratch. What time does to a small contribution you can see in the compound interest calculator.
Educational content. Not personalised financial advice or a recommendation to buy any product or company: Google appears as an example of the reasoning. Past performance does not guarantee future results.