The last few years have been pretty chaotic and this has affected many forms of investment. While there are still ways to invest your money successfully, choosing the right investment strategy can be challenging. Just how do you know your money will be secure? This post looks at some of the popular investment strategies and discusses whether they’re still worth investing in.
Savings accounts?
Savings accounts are always a secure option – you’re never going to lose money. That said, interest rates are currently the lowest they’ve been for a long time. In other words, while you may not lose money, you may not make much money either.
If you are going to put money in a savings account, take the time to shop around for interest rates. Look beyond traditional brick-and-mortar banks – online banks can sometimes offer better rates.
Stocks?
Putting your money into stocks can typically result in much bigger returns than if you were to put your money in a savings account. However, it all depends on which stocks you choose. The last three years have been very rocky as a result of the pandemic, the recent Russia-Ukraine conflict and general inflation. Many stocks that were seen as secure options have been quite volatile, causing some people to lose a lot of money.
So are stocks still worth investing in? Yes, but you need to be more careful and more watchful as this guide from M&R Capital Management suggests. Avoid those relatively new companies and stick to long-running household name companies that are able to ride out periods of volatility (e.g. Coca Cola, Microsoft, Walmart). Alternatively, consider help from an asset management company.
Crypto?
Cryptocurrencies are relatively new. They are digital currencies that can be traded online. Many cryptocurrencies have skyrocketed in value over the last decade, making them a popular source of investment. The downside of investing in crypto is that it’s very hard to predict and more volatile than stocks – the likes of Bitcoin have witnessed huge fluctuations in value over the last few years.
It’s best not to invest all your savings into crypto and to diversify among various different cryptocurrencies to spread the risk. Do your research before buying cryptocurrencies.
Real estate?
Real estate has long been a popular investment and continues to show promise as prices continue to climb. Renting out property is often one of the most profitable and secure forms of investment. The biggest obstacle with real estate is that you often need a huge amount of money upfront to invest in it (unlike savings, stocks and crypto which you can invest a few dollars into). Real estate is also typically a lot more hands-on.
If you’ve got thousands of dollars to place on a down payment for property, you should consider doing it. To reduce risk, always arrange a home inspection before buying and consider hiring a property manager to take care of tenants. This guide at Fortune Builders explains more about investing in real estate.
Somewhere else?
There are many other places that you can invest your money such as precious metals, collectibles, forex, peer-to-peer lending and domain names. These options are typically not as secure unless you really know what you’re doing. It’s worth following your passions when investing as you can make much more calculated investments. For example, if you love vinyl, it may make sense to invest in records – you’re more likely to know which records will increase in value than someone who isn’t a vinyl enthusiast, and potentially more likely to make money.
