What’s worse is that most of them carry a huge risk, a seemingly equal number of pros and cons, and positive and negative investor anecdotes. If the information regarding investing in the digital age has been too overwhelming for you, this is where you belong.
This article contains simple, precise, and well-researched tips that you need to figure out where you need to invest your money this year.
Let’s begin!
Stocks
Although stocks are always presenting mixed outcomes, they’re still the way to go this year. According toThe Motley Fool, stocks often earn higher returns than CDs, government bonds, gold, and other alternatives.
Since their returns usually outpace the inflation rate significantly, they also have the ability to cushion investors from inflation. The fact that they allow investors to start small owing to the availability of fractional shares makes them ideal if you’re looking to start small.
saving goals • reduce debts • saving for college • save for retirement • saving for an event
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Increase Savings
define savings goal reduce debts save for college save for retirement save for events
Increase Savings
| define savings goal |
| reduce debts |
| save for college |
| save for retirement |
| save for events |
As with most things, however, stocks are not created equal. You need to be very selective here. Look for stocks whose annual and quarterly earnings have recently grown by at least 25%.
We all know that tech stocks have been making having a good track record of good, steady, and fantastic gains over the years. You should certainly focus on them as well. As you do so, consider recent IPOs that are recording tremendous growth.
Real Estate
Real estate prices have been increasing steadily because land typically holds its value, and it’s always in limited supply. If you invest in real estate this year, you’d also enjoy the low market fluctuations.
Real estate is more resilient to economic changes. People always need a place to live even when the economy slumps.
To get started, you should consider the Real Estate Investment Trusts (REITS) as they provide a stable stream through a solid dividend yield. REITs are particularly great for individuals who are looking to invest in the real estate market without blowing their budgets.
This is because they allow investors to purchase shares in established real estate portfolios.
Mutual Funds
If you’re not properly acquainted with stock investing but don’t want to miss out on its benefits, you should consider mutual funds. Mutual funds are a collection of stocks that are selected and managed by a mutual fund manager on your behalf.
They essentially allow you to purchase and control a collection of stocks at once. That means that with them, you get to enjoy low risk, convenience, and diversification.
According to Nerdwallet, some of the top-performing mutual funds to consider this year include:
- Bridgeway Small-Cap Value
- DFA US Small Cap Value I
- Bridgeway Ultra-Small Company Market
High-yield savings accounts
These accounts basically pay you interest on your account balance. They have lower overhead costs, and the yield is usually higher than the one you’d get from a regular savings account.
The financial institutions that typically offer high-yield accounts are FIDC-insured. That means that you should never worry about your deposit getting lost.
If you’re more risk-averse, a high-yield savings account would be great for you especially if you don’t need money in the short term. In this regard, some of the best institutions you should consider approaching for this kind of investing are Axos Bank High Yield Savings, Live Oak High Yield Online Savings, and Vio Bank High Yield Online Savings Account.
Certificates of deposit (CDs)
CDs are products offered by banks, and they provide a certain interest rate premium to you if you agree to leave a certain amount of deposit untouched for a set period of time. CDs are extremely safe, and they offer higher interest rates compared to savings accounts.
other related articles of interest:
What are the Best Investments for People who are Already Retired?
4 Investments Anyone Can Start Their Financial Portfolio With
As you can imagine, this type of investment is ideal for someone who doesn’t need immediate income, such as a retiree, and a risk-averse investor.
As you look for your ideal CD rates, remember that the top available CD rates in the country are usually up to five times higher than the average. Therefore, you’d be doing yourself a huge favor by shopping around.
If you’d wish to calculate inflation before making your investment decision, you can look for a good CPI Inflation Calculator online to help you out.
Although it can be hectic to find the best investment instrument depending on your goals, there are investment options that have a better chance of growing your money steadily and hedging you against losses. They include stocks, mutual funds, CDs, real estate, and high-yield savings accounts.
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