Monday, October 19, 2020

What are the 6 Best Investments To Make Today?

Saving your money is one thing, and growing your savings is another. The savings can hold your back in difficult times and help in meeting unforeseen needs. If you grow your money, you’d never land in difficult financial situations. So, are you interested in multiplying your capital? Then, you should find a suitable way for […]

Saving your money is one thing, and growing your savings is another. The savings can hold your back in difficult times and help in meeting unforeseen needs. If you grow your money, you’d never land in difficult financial situations. So, are you interested in multiplying your capital? Then, you should find a suitable way for you to invest your money. When investing is taken seriously, the returns can provide you a financially secure future. It may sound like cumbersome tasks to look at all investment methods, compare them, analyze them, and choose the most suitable one. Well, you don’t need to stress out as we are here to guide you. In this post, we’ve enlisted the best investments to make at any point in time. So, let’s get the ball rolling!

How to Choose the Best Investments: Complete Guide

Many individuals have this question in mind: “Why should I invest, and where should I invest?” Well, investing is a great method to put your money to work. It enables you to grow your savings, and it even serves as an additional source of income. It is very important for those who aren’t going to need a specific amount of money for a long time.

Let us consider these two hypothetical situations:

Both X and Y have $10,000 that they want to save, and they don’t need this $10,000 for 40 years. 

Situation 1: X saves money by keeping it safe in his home locker to protect this hard-earned money. 

Situation 2: Y invests his money in mutual funds. 

After 40 years, X is only left with $10,000 for his post-retirement life. In contrast, Y winds up by earning around $452,500 with an expected interest rate of 10% per year. 

In this example, you can see the difference when relying on investment options. Hence, it is always wise to let the saved money work for you and grow over time.

Now the question arises with so many options at disposal, how will you choose the most profitable investment method? Well, you need to consider some factors to make the right choice.

Factors to Emphasize Before Choosing an Investment Instrument

Here are the factors to consider for choosing the most suitable investment medium:

1. Financial Objectives

Before selecting an investment instrument, you should be aware of your financial goals. Are you investing for your children’s higher studies? For buying a dream property? Or, for your retirement? You should take into account your objectives; you will need it before you start calculating how much money you have to save to reach them.

For example, if you are planning to invest your retirement, you will probably have more time and amount than to buy a property.

2. Time Horizon

The time horizon is another important factor that depicts how long you would like to keep yourself invested or how many years to reach your financial goal. Various schemes ranging from long-term, short-term to medium-term investments are available according to your requirements.

3. Risk Tolerance 

It is always important to analyze your ability to have an enormous tolerance of any risk, whereas another may not bear the loss or risks related to the markets. Therefore, before investing in any scheme, increase your risk tolerance power.

4. Level of Growth

It is wasteful to invest in a scheme that is not going to give you satisfactory returns. Therefore, always check out how much growth your investment will witness over time.

Evaluate the previous performances, returns, and other various factors to grasp the knowledge of how your investment will grow and at what level it will expand in the future.

6 Best Investment Options

Let us now have a look at 6 best investments to make :

1. Exchange-Traded Funds (ETFs)

ETFs are always good choices for any type of investor, whether you are a novice in the stock market or an expert investor. The ETFs allow you to build a diversified portfolio with considerably low investments, making them suitable for newcomers in the stock market who have a little money to invest. ETFs are listed and traded on a stock exchange, which makes them liquid and cost-effective.

But you are wondering how to choose the top-preforming ETFs to buy, should you buy a few from different industries? You can spend a lot of time on research, but we recommend considering trusting professional financial institutions.

If you don’t have a big amount of money but want to create a diversified portfolio of ETFs, Robo- advisors like Wealthface can be smart and cost-effective.

2. High Dividend Stocks

Historically, equities have delivered impressive returns but also have a higher risk than other asset classes. Don’t let the bull market exaggerate your equity allocation. Consider adding some high dividend stocks in your portfolio. The dividends provide a kind of a cushion in a volatile market. In case the price of the underlying stock fall, you’re still earning steady dividend income. You can then decide what to do with it, either receive the cash or reinvest the dividend earned.

3. Importance of cash in your portfolio

Cash plays an important role in times of uncertainty. You can use cash and cash equivalents to provide a cushion against job losses, pay for contingencies, or have the ability to invest when the financial universe has clear signs of the settlement. However, cash is suitable only for the short term as it was one of the most underperforming asset classes over time.

Make sure you have 3-6 months of your expenses on your savings account to be prepared for a time of uncertainty.

4. Real Estate

Despite a plethora of investment choices, real estate has proven to be one of the best investments. Properties can flourish their owners with a consistent source of income and low volatility.

However, this type of investment is good for large investors as it lacks  liquidity and diversification. For smaller investors who want to include properties to their portfolio can go for REITs (Real Estate Investment Trusts). A REIT owns and operates commercial or residential properties. Moreover, it pays out about 90% of their incomes to the investors in the form of dividends what makes them favorite for income-seeking investors. REITs are traded on a stock exchange as any shares to be sold at any time.

5. Commodities

Commodities are playing a very important role within your portfolio. Traditionally, the price of precious metals such as gold, rises in times of crisis.

One of the examples of how you can invest in gold is the Gold ETF.  SPDR Gold Shares is the largest physically-backed gold exchange-traded fund in the world.

Like buying or selling stocks of companies, ETFs are traded on the stock exchange during market hours as other stocks. And we already mentioned, it cost-effective compare.

6. Invest in Yourself

Investing in yourself is one of the best returns you will get on the investment, whether it’s investing in learning a new skill, personal or professional development, taking advancement in your creativity, or hiring a coach before you can give yourself a new skill. We must take the time to grow our strengths and abilities so that we can serve others better.

What are some of the steps you can take to invest in yourself?

1. Invest in skills that will enhance your strengths.

Improving your skills does not always mean investing in higher education, although this is certainly an option and perhaps a necessary one depending on your career field. Investing in your skills and training can take several forms.

2. Discover Your Creative Side

Most of us have a reservoir of creativity that has never been tapped or has certainly not been used to its highest potential. We may need to uncover and enhance our creativity. Creativity, in any form, helps us to grow personally and professionally, to see problems and solutions in different ways, and to make use of other parts of our minds that may have been previously untapped. It is important to keep in mind that creativity has many faces. It’s much wider than being a painter or a sculptor; it’s also about trying new things.

3. Nourish Your Mind and Body

Nourishing your mind and body allows you to have more to give now and in the future — more energy, knowledge, compassion, ideas, strength, physical and mental endurance.

Finally, investing in yourself emotionally, physically, spiritually, and financially will make it possible for you to become the best version of yourself. If you’re the best version of yourself, you’re going to be an attraction magnet for others!

Final Thoughts

There are plenty of investment options ranging from safer to riskier, and lower-returns to higher-returns.

To invest like a pro, you must have deep knowledge about the various investment options available. Consider various factors such as financial objectives, risk level, period, growth level, etc., to opt smartly for a suitable scheme.

Always remember that savings and investments are two different things. Therefore, Wealthface helps you to grow your wealth by using a smart scheme of investing.

 

Wealthface - Your online investment solution


Wealthface is a one-stop online investment company that services all kinds of investors. It provides affordable high-quality investment products and services, tailored to each type of investor, and delivered at a low cost in a fully transparent manner. The company plays the role of a Fiduciary investment advisor, which means it always puts the client’s interest first.

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