If you plan to enjoy your retirement with financial freedom, you need to make the necessary arrangements now. With the economic fallout, we\u2019re now experiencing due to the pandemic, we saw just how easy it is to lose our footing and find ourselves short on income. To help you avoid this in the future, we\u2019ve created this list of ways to invest your money this year. Read on below to find out more.<\/p>\n\n\n\n
Many experts will tell you to invest in low-cost, diversified index funds<\/a> \u2014 funds that have low fees or expense ratios. If you\u2019re only just getting familiar with investments, an S&P 500 index fund is the best place to start. Index funds are a safe investment option since it tracks the top 500 companies available in the stock market.<\/p>\n\n\n\n It also works to spread your investments across hundreds of companies. There are many index funds for you to choose from, which range from specific sectors, industries, or timeliness of the market. You can also invest in an index fund that\u2019s an exchange-traded fund (ETF). These act much like the stocks we already know and also fluctuate during the day, but are more suitable for beginners thanks to their low minimums and costs.<\/p>\n\n\n\n Blue-chip stocks<\/a> are made of huge companies such as Amazon, Apple, Disney, and more. These are the stocks thought to be safe, reliable, and are strong enough to withstand an economic downturn in the long run. Blue-chip stocks are capable of adding reliability and stability into a portfolio \u2014 a blue-chip ETF or index fund is a great way to start investing in these.<\/p>\n\n\n\n If you want to know how to spot a blue-chip stock, make sure to look at its Dow Jones Industrial Average. These stocks will have a proven track record; the SPDR Dow Jones Industrial Average ETF Trust is a popular blue-chip fund due to its low fees. You can also buy shares directly through a broker, so it\u2019s always a good idea to find one.<\/p>\n\n\n\n These stocks come from a company that has a market value of under $2 billion. Such stocks can provide you with a way to invest in a company that can provide you with fast gains and long-term growth. Investing in small-cap stocks in your portfolio is a great way to enhance your portfolio and keep building on your investment strategy.<\/p>\n\n\n\n An excellent small-cap index fund to acquire is the Russell 2000 index. It tracks around 2,000 small-cap companies which are spread across different industries. However, there\u2019s no guarantee that small companies will survive, so the performance of a certain company can\u2019t be guaranteed to continue.<\/p>\n\n\n\n Buying properties and real estate will often come with upfront costs such as the down payment, other fees, as well as renovations that you might make. There could also be unexpected and ongoing costs such as repairs, maintenance, vacancies, and even tenant problems if you decide to rent out your property. If you find that homeownership isn\u2019t the best option for you, you can always invest in real estate investment trusts<\/a> (REITs).<\/p>\n\n\n\n REITs will allow you to purchase shares of real estate with different properties throughout the country. These properties are publicly traded and will have the potential for long-term gains and high dividends. However, keep in mind that dividend payments made through REITs aren\u2019t taxed as qualified dividends and are instead taxed as ordinary income.<\/p>\n\n\n\n If you\u2019re investing through a taxable brokerage account, this may lead to a higher tax bill. Furthermore, when you invest in a REIT, you\u2019re leaving everything up to the management company to manage the properties correctly. You don\u2019t get to have a say in which properties are purchased either, so be sure to keep this in mind.<\/p>\n\n\n\n<\/a>Blue Chip Stocks<\/h2>\n\n\n\n
<\/a>Small-Cap Stocks<\/h2>\n\n\n\n
<\/a>Real Estate and\/or REITs<\/h2>\n\n\n\n
<\/a>Start Investing Today<\/h2>\n\n\n\n