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12 Best Investment Options Right Now

Posted by admin on July 3, 2019
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One good reason to invest now is to secure a stress-free future. Spending all you make without plans for income expansion is not right at all. If you would love to grow or increase your wealth, start considering certain investment options out there.

However, before you join the stock market to build or expand your portfolio, you must decide on three important things,

  • Level of returns you’re expecting to achieve
  • Time frame at which you need to achieve it
  • The level of risk you’re willing to take.

Bear in mind that higher returns on investment often demand higher risk and vice versa. If you want a high ROI, prepare to invest more. But, if your risk tolerance is

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low, or your retirement is near the corner, consider low-risk investment opportunities. Some financial instruments under this category may only yield moderate returns, but at least, your money will be safe.

So, instead of investing a higher portion of your income on high risk-high returns instrument, play safe by choosing the less-risky investments. Also, if you’re planning for short and medium-term financial goals, invest in low-risk instruments too. The reason for investment is to increase your wealth. Therefore, decide and choose wisely as we present the popular investment options right now.

The Best Investment Options Out There

1.    Treasury Securities

If you want to play safe but earn high returns on investment, consider treasury securities. These are instruments which the United States government use for debt payments and project executions. You can invest any amount in them without fears of losses. There are three types of treasury securities to utilize.

  1. T-bills have maturity periods of 1 year or less and do not yield interests. An investor buys them at a rate from their real value and sells at full value to the government upon maturity. For example, you can buy a T-Bill of $10,000 for $9800. When it matures, you’ll sell at $10,000, thereby earning $200 on the investment.
  2. Treasury notes come in terms of 2years, 3 years, 5 years, 7 years or 10 years. This government instrument yields fixed interest for the holders every six months plus the face value earnings upon maturity. However, the price may be high or less or at face value depending on the demand that period. If many investors demands for the T-notes, expect to buy at a premium price. Of course, at this price, you’ll expect to earn lesser.

iii.    T-bonds stay longer to mature than the T-bills and T-notes. The maturity period is usually 30 years, but you’ll get fixed interest every six months and also earn the face value returns upon maturity.

The risks on these treasury securities are almost zero. If you’re an investor hoping to reduce investment risks, consider these instruments. Since the U.S Government sell these treasury securities, you can get your money back on maturity. But, interest rates fluctuations and inflation may also reduce your earnings. T-bills may be the safest of all because it has a shorter maturity period. However, it also means that your returns on investment will be lesser.

2.    Certificates of deposits (CDs)

CDs are bank-issued instruments that offer returns as interest. These time deposits usually come with different maturity dates, which can be several weeks or years. Once you invest in them, prepare your mind to ignore them until the maturity date. However, if you must withdraw from it, expect to pay the penalty.

You can earn more with certificates of deposits depending on the amount you invest. The issuing financial institution will pay you some interests at specific intervals. At maturity, you’ll get the principal and any unpaid interest for that period. As of last month, May 2019, certificates of deposits could offer almost 3% of the principal amount as interest.

Therefore, if you’re thinking of a short or mid-term investment option, utilize these CDs. Also, a retiree, if you wouldn’t mind a little waiting, you can invest in certificates of deposits.

As for the risks in this investment option, there’s nothing to fear.

CDs are safe except during reinvestment. If your CDs matures and you reinvest during interest rates fluctuations, the returns will be lower. Another risk in CDs is that once you lock your funds, you’ll not utilize the future increase in interest rates. Therefore, the best approach is to do “CDs laddering” by investing your money into CDs that have diverse maturity dates.  That way, you can take advantage of interest rates fluctuations in the market.

3.    Dividend-paying stocks.

If you must invest in stocks, go for the types that will yield returns in the form of dividends. Companies pay a portion of their profit to shareholders as dividend every quarter. If you buy these stocks, you can be sure of short-term cash returns and long-term returns as the market appreciates.

However, we may not advise new investors to buy individual stocks. It doesn’t matter whether it’s a dividend-paying stock or not. These types of financial instruments are better for intermediate or advanced investors.

As for whether there’re risks in stocks investments? The answer is yes! However, dividend-paying stocks are better off for you than non-dividend or growth stocks. No matter the type you are choosing, consider companies that are known for dividend increment. Don’t rush towards those that pay highest returns because they may crash for lack of a solid foundation. The good thing here is that the dividend you receive in the form of cash pay-outs is liquid. Try hard to reinvest these dividends for more future returns. It is better to go for the long haul than the short-term returns.

4.    Money market accounts

If you’re interested in emergency savings, consider this FDIC-insured deposit account. MMAs bear interest just like a savings account. However, it offers higher interest but requires that an investor leaves a higher minimum balance in the account. Money market accounts are great for building an emergency fund. These accounts have high liquidity nature and offer a higher ROI opportunity. But money market accounts present more restrictions as a result of these goodies.

There’re restrictions on withdrawals which means that you’ll have limited chances on accessing your money. As for the risk, inflation is one of the threats you may face on your investments. When this economic crisis occurs, it diminishes your purchasing power. Another risk you may face is losing your total investment or part of it if the FDIC does not insure the account

5.    Growth Stocks

Investing in growth stocks is another way of earning higher returns on investments. These stocks can deliver twenty percent on your investment income for many years. Some of the companies that issue growth stocks are tech companies with high sales growth and high profits. You may find stocks from Amazon, Alphabet, and Apple.

One thing though, these growth stocks don’t pay cash dividends. Instead, the companies reinvest the cash into the business to achieve more growth.

This instrument is suitable for veterans in the market or intermediate investors because of the high risks. The growth stocks can grow fast but can also fall so low that investors will lose all. Always remember that there is no way of recovering your money if these stock falls. Therefore, before you pick any, analyze the performance very well. Don’t lose your hard-earned dollars only to be left with dust when the stock market declines.

Growth stocks are liquid just like other stocks. Therefore, you can sell or buy whenever the opportunity arises.

6.    Growth Stock Funds.

Do you want to diversify your portfolio? Would you rather avoid the stress of analyzing individual growth stock to invest? If your answer is yes, this instrument is for you. Your experience in the stock market doesn’t matter. Beginners, advanced or intermediate investors can utilize these investment opportunities to earn additional income.

There are two options to consider if you decide to invest in growth-stock funds-active investing funds and passive investing funds. In the first option, the managers actively select the growth stocks while the second option is investment in index fund.

Therefore, instead of depending on one growth stock and ruin your portfolio, diversify into many stocks.  If you invest in funds, one growth stock that performs poorly will not affect your investments.

Here, the risk is lower than when you pick individual growth stocks. In this instance, you are not likely to miscalculate and pick the wrong stock. The professional managers of the fund will be responsible for selecting and managing the growth stocks to ensure high ROI. Moreover, since you’re diversifying your portfolio, the market movement of one stock will not destroy your years of labor. As for the liquidity, you can sell or invest on any business day.

7.    Short-term corporate bonds funds

This type of financial instrument comes from corporations who use them to raise money from investors. These short-term bonds have a maturity period of one to five years, and as such, they’re usually safe from fluctuations on interest rates. If you are a retiree or planning to invest small amounts, try this opportunity. Also, if you want to reduce portfolio risk but create a stream of cash flow, these corporate bonds funds will suit your goals.

However, there are risks to expect on this investment tool. The short-term corporate bonds funds are not insured under the FDIC. As such, investors may lose their funds if the company runs into financial difficulties. Therefore, if you want to invest, go for high-quality corporate bonds funds to be sure of continuity.

The liquidity of these fund shares is impressive. You can sell off your shares during a business day. Also, you can reinvest your income dividends or invest additional money whenever you want.

8.    High returns savings account

This is one of the best risk-free investment you can make to expand your wealth. These accounts require that you leave your money for a period as deposits. During the investment term, the financial institution will be paying you some interest on it.  If you don’t want the hassles of investing in other instruments or facing unpredictable market fluctuations, utilize this opportunity. Also, if you’re more interested in short-term cash returns, open a high-yield saving account.

The risk of this type of investment is not much. The banks where you open the account are already insured under the FDIC. Therefore, losing your deposit will never happen. However, inflation might cause you to earn less if you reinvest on such a season.  As for the liquidity, you can add or withdraw your funds. The only limitation is restrictions on withdrawals since the federal government regulates the accounts.

But before you pick any bank, make sure that they offer high-quality service in areas of customer handling, easy deposit, and online account management.

9.    Government bond funds

If you’re a low-risk investor, put your money into the government bond funds. These funds invest mainly in the United States debt securities such as T-bonds, T-bills, T-notes and mortgage-backed securities from Freddie Mac and Fannie Mae.

The risk here is almost non-existent. The U.S government are the issuers of these bonds and are capable of repaying the investors at maturity. Therefore, if you’re starting newly as an investor, or interested in cash flow, consider investing in these bond. However, the fund itself may face the effects of inflations since it’s not operating on the financial backing of the government.

As for the liquidity, the shares of these bond fund are liquid. You can add or sell when you want, but the interest rate fluctuations may affect the value.

10.    Municipal bond Funds

This is another investment opportunity for a new investor who wishes to stay safe but earns money. Investing in these funds can help you to grow your wealth. You can expand your knowledge and diversify your exposure without spending time on bonds analysis. These funds target only municipal bonds which the local government or the state government issues. The best part is that any interest you earn is free of both federal, state, and local government income taxes.

The risk of this investment instrument is that you will not make any principal or income payments once you invest. Moreover, these bonds may be called back before maturity. In such a situation, the issuers return your principal amount on the bond and retire it before the maturity date.

These bonds are highly liquid, and you can sell, buy, and reinvest dividends whenever you want.

11.    Nasdaq 100 index fund

Here is the best way to gain from the activities of those giants in the tech industry. Investing in the fund that buys the stocks of the Nasdaq 100. You’re not going to spend time analyzing or selecting the best-performing companies. This index has done the math, and if you invest in the fund, you’re sure of high ROI. The companies listed on Nasdaq are all stable, successful, and not likely to collapse soon.

One good reason to consider this fund is that it enables you to invest in many companies. With such a diversified portfolio, you can protect your money. Also, some of the Nasdaq index funds require a low expense ratio.

Therefore, if you are a beginner in the industry, consider this option. The risk is minimal, and the fund is highly liquid. You can convert your investment to cash anytime the market is open.

12.    S&P 500 index fund

How would you love to own the stocks of 500 successful companies in the world? This S&P 500 index fund will make it possible. Investing in this fund will maximize your wealth more than the interests you earn from banking products.

S&P 500 is a good option when you’re looking for diversification. It gives you access to the best American companies that have come to stay. Through this fund, you can storm the stock market and earn high returns from all angles.

The risk is not much except for the volatility of stocks, which is common in the market. Also, the fund is not backed by the U.S government. As such, investors face the risk of losing their money when the market value drops. However, S&P 500 fund is liquid, and you can sell or buy them easily.

Conclusion

Many options for wealth expansion are out there. You can’t wait any longer when there are many investment opportunities to explore. We’ve presented many instruments in this article. You can check them and pick the best one for your financial goals.

There is no perfect option, but you can make the most out of any instrument you choose. If you can manage your assets, do it. However, if you can’t, find the best broker and entrust the responsibility to him/her.

Don’t wait until you make millions, start with the little money you have and grow it to millions. In everything you do, try to protect your money from fluctuations and volatility in the industry.

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