Top 5 Places To Invest In 2020

Top 5 Places To Invest In 2020

Investing is an effective way to potentially build wealth by putting your money to work. Investing can equip you with another source of potential income, help support your retirement and might get you out of an economic burden in the future. The best part about investing is that it helps you build your wealth and increase your procurement power overtime. The key benefits of investing are as follows:

  • Investing has the potential to give you higher returns but a savings account won’t offer the same potential.
  • Compounding your interest can help you generate earnings from your dividends by reinvesting them.
  • The higher the risk the better the reward. If you are a risk-taker you can opt to invest in cryptocurrency or growth stock but your profit potential will also exponentially increase.

The best investments in 2020 are:

Dividend-paying stocks

Dividend is a portion of the company’s profit that is paid out to shareholders, usually every quarter. When you invest in a dividend, you can earn cash in the short term while waiting for long term market appreciation.

As with stock investments, dividend stocks come with their risk. You should ideally invest in a company that has a history of constant dividend increase rather than selecting the ones which have the highest current yield.

Real Estate Investment Trust(REITs)

Real Estate has always been one of the most preferred assets for investment. Not only do prices for land go up exponentially but they are much less volatile than other forms of investment. Buying individual properties might cost your entire savings and valuable time. Real Estate Investment Trust acts like a mutual fund and gives you a steady dividend yield and maintains low volatility.

Invest in a side business

With the advent of digitalization and ease of access, online business takes up very little investment and know-how. One of the biggest advantages of starting a side business in this generation is that it takes little investment but the return can be quite high.

Starting a side business comes with low risk but needs ample time and work. You can open your own e-commerce website, teach English to foreigners, publish gigs on Fiverr or offer your services at various online platforms.

Short-term corporate bond funds

Companies periodically accumulate money by distributing bonds to investors. They have a maturity period between one to three years which makes them much less receptive to interest rate variations. Corporate bonds can be an attractive choice specifically for those who are looking for cash flow without the overall investment risk but still wants a return on their investment.

Industry-specific index fund

An Industry specific index fund invests solely in business that specializes or operates in a particular industry or sector of the economy. These funds give you limited but quite diverse exposure to the industry without you having to analyze every company in it. If the industry is doing well then your fund will also do well. The best thing about industry-specific index funds is that it allows you to invest in an industry rather than an individual company, minimizing your risks while maximizing your ROI.

March 14, 2020

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