The Future: Invest In Ai Now

There are many options for investing your money, each with its own level of risk and potential return.

Some of the best investments for 2024 include high-yield savings accounts, long-term certificates of deposit, long-term corporate bond funds, dividend stock funds, value stock funds, small-cap stock funds, real estate investment trusts, and S&P 500 index funds.

If you're looking for lower-risk investments, consider CDs and money market accounts. If you're willing to take on more risk, options such as stock index funds and growth stocks could provide higher returns.

It's important to consider your financial goals, risk tolerance, time horizon, knowledge of investing, and how much you can invest when deciding where to put your money. Diversifying your investments and sticking to a long-term strategy can also help you balance risk and return.

High-yield savings accounts

• High-yield savings accounts typically offer interest rates well above the national average, which currently sits at around 0.45%. Some accounts offer APYs of 5% or more, which is over 10 times the national average.
• These accounts are generally safe and secure. Most high-yield savings accounts are insured by the FDIC or the NCUA, which means your deposits are protected up to $250,000 per depositor in the event of a bank failure.
• There are usually no monthly fees or minimum deposit requirements for high-yield savings accounts, making them accessible to a wide range of savers.
• You can easily open a high-yield savings account online by providing your personal information, such as your name, contact details, and Social Security Number. You will also need to make an initial deposit to fund your account.
• These accounts offer more flexibility than other types of accounts, such as CDs, as you can access your funds without incurring penalties. However, there may be limits on the number of withdrawals you can make each month.
• Interest rates on high-yield savings accounts can fluctuate and are often linked to changes in the federal funds rate. Keep an eye on the market and be prepared to switch accounts if rates become uncompetitive.
• When choosing a high-yield savings account, consider factors such as the APY, fees, minimum deposit and balance requirements, compounding frequency, and the reputation of the financial institution.
• Some popular options for high-yield savings accounts include UFB Direct, Credit Karma Money Save, Varo Bank, My Banking Direct, and Cloudbank 24/7.

Long-term certificates of deposit

CDs generally have terms ranging from three months to 10 years, with common lengths being one, three, and five years. The longer the term, the higher the interest rate you'll typically get. When you invest in a CD, the bank will pay you interest at regular intervals, and once it matures, you get your original principal back, plus any accrued interest.

While CDs are considered safe investments, they do carry reinvestment risk. This means that if interest rates fall, you'll earn less when you reinvest your principal and interest in new CDs with lower rates. On the other hand, if rates rise and you've already locked your money into a long-term CD, you won't be able to take advantage of the higher rates.

It's important to note that inflation and taxes could significantly erode the purchasing power of your investment in a CD. Additionally, there are usually early withdrawal penalties if you need to access your money before the CD matures.

When choosing a bank for your long-term CD, consider the interest rates offered, the term lengths available, and any minimum deposit requirements. Online banks tend to offer higher rates than traditional brick-and-mortar banks, but it's still worth shopping around to find the best deal.

Dividend stock funds

When considering dividend stock funds, it's important to assess your investment goals, risk tolerance, and financial situation. Dividend funds can provide regular income, capital growth, or a combination of both. It's also crucial to evaluate the fees associated with the funds, as these can eat into your returns. Additionally, look for funds with a large number of stocks and a diversified portfolio to minimize risk.

Overall, dividend stock funds offer a combination of stability, income, and growth potential, making them a compelling investment option for a variety of investors.

Value stock funds

When choosing a value stock fund, investors should consider their risk tolerance and investment goals. Some value stock funds are actively managed, while others are passive and track a specific index. Actively managed funds may have higher fees but can offer the potential for higher returns. Passive funds tend to have lower fees but may not perform as well as actively managed funds.

• Vanguard Value Index Fund Admiral Shares (VVIAX): This fund has over $143 billion in assets and is considered a core holding. It employs a long-term buy-and-hold approach, investing in stocks that make up the CRSP US Large-Cap Value Index. The fund has a low expense ratio of 0.05% and has returned 10.48% over the last 10 years.
• Vanguard Selected Value Fund (VASVX): This actively managed fund targets undervalued companies in the mid-cap range, making it an ideal satellite holding for a portfolio. It has returned 8.79% over the last 10 years and has a low expense ratio of 0.32%.
• Vanguard Small-Cap Value Index Fund Admiral Shares (VSIAX): This fund captures the small-cap range of stocks, offering even greater upside potential. It has over $45 billion in assets and has returned 9.46% over the last 10 years, with a low expense ratio of 0.07%.
• Fidelity New Millennium Fund: This fund seeks capital appreciation by investing in common stocks.
• Vanguard Equity Income Fund: This fund seeks to provide an above-average level of current income and reasonable long-term capital appreciation by investing mainly in large- and mid-capitalization companies.

Robo-advisor portfolio

A robo-advisor is a low-cost, online investing platform that uses software algorithms to create and manage investment portfolios for individuals based on their goals, time horizon and risk tolerance. The process usually begins with a questionnaire to assess an individual's objectives, including goals, liquidity needs, time horizon and risk tolerance. With this information, the robo-advisor constructs a core investment portfolio to fit the individual's criteria.

Robo-advisors are a good option for those who don't want to do much investing themselves and prefer to leave it to an experienced professional. They are also another great alternative if you want to be largely hands-off with your investments.

Betterment

Betterment is one of the pioneers of the robo-advisor approach to investing. It offers a competitive annual advisory fee of 0.25% of your balance, and there’s no minimum balance requirement. Betterment also provides alternative portfolios to choose from, including one focused on environmental, social and governance (ESG) factors.

SoFi Automated Investing

SoFi Automated Investing is a great choice for those who are primarily focused on limiting fees. There’s no annual advisory fee, and your portfolio is stocked with ETFs that generally charge low expense ratios. SoFi also grants you access to real-life professionals to talk over your financial situation.

Vanguard Digital Advisor

Vanguard Digital Advisor is a good option for those who are just starting out in their career or looking for a simple tool without too many bells and whistles. It offers a low annual net advisory fee of no more than 0.20% of your managed account balance. Your portfolio will be made up of ultra-inexpensive Vanguard ETFs, which typically charge among the lowest expense ratios on the market.

Wealthfront

Wealthfront is the best overall robo-advisor due to its vast customization options, fee-free stock investing, low-interest rate borrowing, dynamic tax-loss harvesting and other key features. It has a low required minimum investment of $500, plus customizable automated portfolios.

Ellevest

Ellevest is the best robo-advisor for women investors. It was designed to provide financial management aligned with women's specific career and life situations. It offers tailored investment portfolios, low-cost subscription pricing and discounted financial advisor access.

Frequently asked questions