If you want to ensure you’re as comfortable as possible in your future, you should consider looking for a good investment opportunity. Even if the economy seems stable, you can never be sure when it’s going to turn on its head and leave people without jobs and an income. That’s why having a backup plan is always smart.
While there isn’t an investment that is guaranteed to help you earn a lot of money, there are a number of different ones that are bound to bring in some returns. Experienced investors know a good opportunity when they see one, and here are some of them.
7 best investment options to consider
Getting into the world of investments can seem daunting and a lot of people are scared they’re just going to lose their money. But if you want to go for safer options that have high chances of success, you should consider the following investments.
Real estate
Buying real estate and renting it out has always been a great investment opportunity because there will always be people who want to rent out a property, especially in popular areas.
Since the home buying power has increased 21% from 2020 to 2021 and will probably rise even more in 2022, now is the perfect time to buy property. Mortgage rates have also been low in the last few years, so if you have enough funds for this investment, you should give it a shot.
You just need to select the perfect property, buy it outright or finance it, maintain it regularly, and start looking for tenants. If you want a long-term investment that will ensure you see returns every month, you can’t go wrong with real estate.
As we already mentioned, if you own and rent out real estate in a popular area, you’re sitting on a goldmine. For instance, people who own real estate in popular winter resorts may need to pay a bit more for the property but their investment pays off very well.
If you’re interested in real estate in Verbier for example, you can take a look at Verbier real estate prices and regulations and see if it’s a good fit for you. That way, you’ll know whether this popular resort is the right choice for you or you should look for something else
Currency trading
Currency trading is usually best suited to experienced investors because they know how challenging and stressful it can be to keep up with the stock market.
Exchange rates often come with quick-paced changes and anyone who chooses to start investing needs to be ready to deal with the added pressures of currency trading. However, if you’re willing to put in the time and effort and actually learn more about the stock market, it can be a solid investment.
However, you shouldn’t enter currency trading lightly and invest all of your money in it, even if you know what you’re doing. Do your research, find out which stocks have the highest chances of performing well, never put all of your eggs in one basket, and tread lightly.
Cryptocurrency
You’ve probably already heard about cryptocurrency as it’s become very popular in the last decade. If you haven’t, the short explanation is that cryptocurrency is an electronic currency that acts as a medium of exchange and can be used to purchase goods and services in certain markets.
When it comes to cryptocurrencies, you need to be aware of one thing. Since this is an electronic currency, traders have been hacked in before and there have been some high-profile thefts in the past. Another reason why cryptocurrency is seen as a risky investment is that these digital coins often escalate in value.
However, there is a very high demand for digital currency and if trends continue going in the same direction, there is a high chance the usage of cryptocurrency will become much more widespread.
Getting into the cryptocurrency market is a very popular choice of investment for many people and the market size for cryptocurrency will reach $1087.7 million by 2026.
Most investors see it as a good opportunity because the supply is fixed. There is a set amount of each coin on the market and unlike bank-controlled currencies, crypto can’t be printed at any time.
The most profitable and well-known cryptocurrency is Bitcoin. If you want to educate yourself on the topic, here is all you need to know about Bitcoin investment.
International investing
Achieving geographical diversification has become very important in the last couple of years, so sophisticated and serious investors have started taking international investing seriously.
International investing is an investment strategy where an investor holds securities that were issued by governments or companies that are based in countries other than their own. This is usually done so people can take advantage of the growth of emerging markets in foreign countries.
The reason why serious investors are interested in international investing is that it gives them the chance to diversify their profiles and the ability to avoid domestic market risks. If you opt for international investing, you will be able to access opportunities in different markets and explore investments your fellow investors might not be aware of.
However, you need to keep in mind that economic and political turbulence might negatively affect your foreign investments. Additionally, if you decide to invest in foreign firms, you might not be able to get all the vital information related to them easily.
Short-term corporate bond funds
Sometimes, when corporations need to raise money, they issue bonds to investors. Multiple corporations, sometimes even hundreds of them, often group their bonds together into bond funds and sell them to investors.
There are two types of bonds. The first is short-term bonds that have a maturity of anywhere between one to five years.
The second is long-term bonds that last for over five years, but they’re typically not a smart investment opportunity so most investors opt for short-term bond funds. They are a great investment for low-averse people because they provide a quick cash flow and an almost guaranteed return.
Just like government funds, short-term corporate bond funds aren’t FDIC-insured. However, these bonds often yield much more than government bond funds and are very low-risk if you find the right companies to invest in.
The only risk that might come from this type of investment is that the company from which you buy bonds might run into financial trouble or have its credit rating downgraded. If this happens, the company will default on the bonds and you will lose money.
But you can avoid this risk if you do thorough research on the companies you want to invest in and only buy funds that consist of high-quality corporate bonds.
High-yield savings accounts
You’re probably familiar with savings accounts that earn you a small interest on the money you have on the account in your brick-and-mortar bank. High-yield savings accounts work similarly and they pay you interest on your cash balance.
You can view a high-yield savings account like an accessible vehicle for your cash. It doesn’t have as many overhead costs as a regular savings account so you will be able to earn a much higher interest when you use an online bank.
This is a generally safe investment and the only issue you might have is losing purchasing power if you have low rates and inflation occurs. Otherwise, it’s a great investment opportunity for those who are looking to have liquid assets as you can withdraw your funds at any time, even via an ATM.
However, the bank you choose to use to open your savings account might limit you to as few as six withdrawals for one statement period.
S&P 500 index funds
Investors who are looking to achieve higher returns than they would with bonds or savings accounts often opt for an S&P 500 index fund. This fund is based on approximately 500 of the largest and most successful companies in the US including Amazon, for instance.
Just like most funds, an S&P 500 index fund allows you to own one piece of the companies in the fund. One of the biggest benefits it offers is that it includes only successful businesses from every industry, which means it’s much more resilient and risk-free than most other investments.
This is a popular investment method for people who want to invest in stock but want it to be as risk-free as possible. Historically, the index has done very well and most investors are satisfied with their returns.
Final thoughts
Investing has proven to be a great way to generate wealth over time and investors are lucky enough to have a wide range of different investments to choose from. No matter if you’re willing to take a risk or not, if you want an instant payout or are willing to wait, if you prefer low or high returns, there’s definitely something for you.
It’s impossible to predict what investments will generate high returns and which ones will be a complete miss, but you can still play it safe and choose an opportunity experienced investors often go for.
