Today we will be talking about 2021 investment options because it’s time to forget everything that happened in 2020 and move forward! Let’s be honest, 2020 was not the year of our dreams because of the pandemic, wildfires, and all that stuff, you know…
Save The Stock Market, Invest!
Now let’s talk about investments in general. There are many ways to build wealth and investments are one of them. Consequently, if you want to consider yourself as an affluent person, you should familiarize yourself with investments and the best investment options! Obviously, you wouldn’t want an investment with low interest rates, especially now with Covid-19 when the stock market is suffering. The financial situation of companies can become worse if you, as a business owner, don’t invest in the stock market.
What Are The Best Investments For 2021?
Mutual Funds
Wealth managers often say that mutual funds are a good way to build wealth, become rich, and to double your money. A mutual fund “is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt.” Obviously, this investment option has numerous disadvantages now that we’re talking about them, so let’s dive deeper to see all the aspects of this option:
- They offer various ways to earn money. For example, dividend payments, capital gains distributions, increased NAV and so forth.
- As Investor.gov states, most mutual funds set a relatively low dollar amount for initial investment and subsequent purchases.
- What’s more, if you choose a mutual fund, you can easily redeem your shares at any time, for the current net asset value (NAV) plus any redemption fees.
- Mutual funds are famous for their diversity! They invest in a range of companies and industries which automatically lowers the risk if one company fails. Profitable, isn’t it?
What Is A Stock?
A stock is a type of security. With its help, stockholders receive a share of ownership in a company. And for the record, they are also known as equities. As it is mentioned in Investor. gov, there are two main kinds of stocks, common stock and preferred stock which can belong to one or more categories which are:
- Growth Stocks
- Income Stocks
- Value Stocks
- Blue-Chip Stocks
There’s one more thing that you should know: stock is an asset class. By the way, asset classes are the investments that have similar characteristics. They include stocks, bonds, and cash. Stocks are not that easy to understand, but when you do, the world is at your disposal.
Growth Stocks are the most used ones because they have earnings growing at a faster rate than the market average. What’s more, “they rarely pay dividends and investors buy them in the hope of capital appreciation. A start-up technology company is likely to be a growth stock.”
Individual Stocks
Another investment option is an individual stock. It identifies a share of ownership that this or that person has in a company. Why do people prefer buying stocks? Because the biggest return on investment comes from stocks, especially when your money is exposed to the highest degree of instability.
This option is chosen by those who have a good portfolio that is not only saturated with investments, but is also extremely diversified. If you’re an investor who is looking for risks and chances to take, buying stocks is one of them.
Certificate of Deposit
Issued by banks, this investment option is good for those who can wait. Of course, this is a safe and harmless investment option, but still, it’s considered the most conservative one. So, if you have time on your hands, don’t hurry anywhere and are ready to see your money grow in a long time period, this is a good option! In general, this method is mostly chosen by senior citizens who don’t need money ASAP. What’s more, they offer a fixed interest rate.
According to official sources, “a certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years, and in exchange, the issuing bank pays interest. When you cash in or redeem your CD, you receive the money you originally invested plus any interest.”
Don’t forget about risks! Remember, if every investment is a risk, every investment option has its own dangers as well. Obvious, right? So, CDs also have a huge risk despite their safe and secured nature. More specifically, everything depends on the relationship between the rate of return and the rate of inflation. If these two don’t move together, you will eventually lose the purchasing power.
In other words, if you’re looking for an option with a fixed interest rate which is also safe and secured, this is one of the best opportunities for people like you. Finally, if you have time and you can wait, you can always choose this option!
Short-Term Corporate Bonds
Another investment option are short-term corporate bond funds. You see, some corporations grow their wealth by issuing bonds to investors. The maturity of short-term bonds varies from one to five years which means they are safer than long-term or intermediate ones. Why? Just because they’re less vulnerable when it comes to interest rate fluctuations.
What’s very important, fund shares can be sold whenever your heart decides to do that. As you can see, it’s really easy when it comes to short-term corporate bunds. Apart from that, reinvesting income dividends is also an option when it comes to this investment opportunity!
Money Market Funds
“Money market funds are a type of mutual fund developed in the 1970s as an option for investors to purchase a pool of securities that generally provided higher returns than interest-bearing bank accounts. They have grown significantly in the ensuing decades.”
If you’re thinking about having a lot of money and your personal finance, you can go for this fund. Why? Because it’s a safe and profitable investment! As you can see, there’s a low risk of losing your money, but still, consult a specialist. Even the most secured fund has risks and dangers! Investing is a crucial step that contributes to economic recovery and to fulfilling your financial goals. If you have decided to invest, do it at a right time, in the right place and in the best way possible!
Exchange-Traded Funds
If you’re looking for the best investment opportunities, this is one of them! “ETFs are a type of exchange-traded investment product that must register with the SEC under the 1940 Act as either an open-end investment company (generally known as “funds”) or a unit investment trust.”
This is one of the best investment opportunities if you’re looking for one, of course! But please, if you choose this fund, please don’t forget that it’s not the same thing as mutual funds. ETFs are very similar to mutual ones, but there’s a slight difference between them! ETF is the combination of a mutual fund and closed-end fund. So, if you need help, you should definitely contact specialists.
REITs: Good or Evil?
What is REIT? “A REIT is a company that owns and typically operates income-producing real estate or related assets.” Well, REIT has many advantages to consider:
As it is stated on the website of U.S. Securities and Exchange Commission, “REITs provide a way for individual investors to earn a share of the income produced through commercial real estate ownership – without actually having to go out and buy commercial real estate.”
Conclusion
Stock market is full of opportunities and it’s always important to keep an eye on every single opportunity that pops up. Everyone wants to achieve dizzy business heights, but some people want to go higher and higher, and that’s, by the way, more than possible. In reality, the index of success can be much bigger if you choose the right industry to invest in. What’s more, you should know that this path is a risk itself, and if you still want to invest, you need to do that very carefully.
This is why before actually investing, companies should always consult specialists. Professionals of the industry will create strong bond between the client and their investments, which will, in turn, ensure fewer losses, fewer problems, and business growth. If there’s a strong bond between you and your investments, your business will surely succeed, and what’s more, you won’t spend several years building your wealth.
So invest and do it wisely! 2021 will be your year, just value each of your investments! After all, if you invest right, you will forget about your credit card and will start paying with real and tangible money! Because, why not?
