People tend to categorize investing in the stock market as being high-risk. They also refer to bonds as safe investments.

But how accurate is this? Are bonds truly one of the safest investment vehicles? The editors at SmartMoney magazine aren’t so sure.

In early January, SmartMoney ran an intriguing story looking at the rush investors have made to sink their dollars in municipal and corporate bonds. These investors are pouring their money in bonds for one reason: They’re looking for investments that are safe and steady.

Thing is, not all bond funds have performed well for these investors, SmartMoney wrote. Many bonds are yielding less than half of the returns they were offering just last summer, according to the story.

This comes as shocking news to many investors. We’ve all been conditioned to view bonds as safe investments. Sure, they may be boring, with returns that seldom soar as high as do the ones provided by the best stocks. But bonds are steady, we’ve been told.

But bonds are like most investments: You can lose money on them.

And that’s been happening a bit more these days. The writers at SmartMoney compare it with real estate in the 2000s and tech funds in the 1990s. These investment vehicles, too, were hot, with investors rushing to put their money in them. Then they both crashed, erasing a lot of paper fortunes as they did so.

There hasn’t been a bond crash. But SmartMoney writes that there is certainly a bit of a bond slowdown going on now.

It’s not that bonds are bad investments. It’s just that they bring with them the real potential for risk. This means that investors need to do as much research before investing in bonds as they do when they put their money in the stock market.

This is where the advice of a trusted financial advisor comes into play. A financial partner can help you study the bond markets and find the investment vehicles that work best for you. There’s no reason why your portfolio shouldn’t include some bond investments. But it should also include other vehicles, such as stocks. The key to a successful investment portfolio still lies in diversifying your investment dollars.

Next time you read about an investment vehicle that comes with no risk, don’t believe the hype. Even those investment vehicles that promise slow, somewhat boring returns, come with their own risks.

There was a time when people considered real estate to be the safest investment a person could make. And why not? During the big real estate boom of the late 1990s through the first half of 2006, home values across the country shot up. People who bought condos or single-family homes in most major cities saw their housing values skyrocket sometimes by 200 percent or more.

Of course, those days are long gone. Today, a growing number of homeowners are watching in horror as their housing values continue to fall. The Wall Street Journal recently reported that nearly 25 percent of U.S. homeowners were underwater in the third quarter of 2009. This meant that they owed more on their mortgage loans than what their homes were worth, a financial situation no one wants to be in.

That leads to one big question: Is real estate still a sound investment?

The answer, not surprisingly, is complicated. It all depends on how quickly you want to make money.

With the real estate boom ended, flipping real estate properties is no longer an effective way to make big money. This was a big trend in the late 1990s, early 2000s: Investors would buy condos or single-family homes in trendy city neighborhoods or in communities that were in the middle of becoming trendy. They’d renovate these often dumpy residences – adding such touches as new hardwood floors, updated kitchens and larger master bedroom suites – put them back on the market and sell them for double what they paid.

Flipping made a lot of people very wealthy very quickly. Today, though, real estate investors have to exhibit a different kind of skill: patience.

Today’s investors must hold onto a home for five, seven or 10 years to see any serious price appreciation. This may seem unfortunate, but it’s actually the way real estate investing used to work. You’d hold onto a property, either living in it or renting it out, and then sell it for a solid profit of $50,000 or more. That’s not bad for an investment that you hold onto for seven years or so. Historically, housing values have increased. And by holding onto a home for seven years, you can increase your odds of riding out any real estate slump or slowdown that might occur.

So, yes, real estate investing is still a positive option for your investing dollars. Just don’t expect to make a fortune overnight. Real estate today is truly a long-term investment.

Not many beginning investors understand how a variable annuity works. But the investment products are actually rather simple. And they may have a place in your investment portfolio.

At their most basic, variable annuities, like fixed income annuities, are a contract between an investor and an insurance company. Investors agree to pay, either in a series of payments or in one lump sum, a fee to the insurance company. The insurance company then agrees to send payments to the investors either immediately or at a future date.

The annuity’s managers will invest the payments they receive into a range of investment options, usually mutual funds. Of course, because the performance of these funds is not guaranteed, investors will either see their investments increase in value or fall. This is no different than investing in mutual funds or stocks in general.

Annuities do differ in that insurance companies will send investors in a variable annuity a stream of payments on a regular basis. These payments, which usually come every month in the form of a check, can last for a set period of time, such as 20 or 30 years, or for an indefinite period, such as the lifetime of the investor.

Because of this “checks for a lifetime” option, many older investors place some of their dollars in variable annuities. They like the idea of receiving that extra check. It provides them with a boost in their financial security.

Variable annuities also have another benefit: Their earnings are tax-deferred. This, too, appeals to a lot of investors who are seeking tax havens for their dollars.

Finally, many variable annuities provide a death benefit. When investors pass away, the annuity pays a lump sump to the investors’ named beneficiaries. This lump sum is usually the annuity’s account value or an agreed-upon minimum payment, whichever is greater at the time of the investor’s death.

Those are some heady benefits. But variable annuities, and all annuity products, do have their critics. The critics point out that some life insurance companies charge investors hefty fees for the right to put their dollars in an annuity. Others don’t like the sometimes hard sell that life insurance companies engage in when trying to sing investors up for their annuity products.

Like all investment opportunities, variable annuities come with their own set of positives and negatives. It’s up to individual investors to do the research needed to determine if any kind of annuity is right for them.