Invest Now: Hot Trends

There are many options for investors to consider, depending on their risk appetite, financial situation, and goals. Here are some of the top investment ideas and trends that are hot right now:

- Stocks: While the market has been volatile, there are still opportunities to invest in individual stocks or stock funds. Bank of America has highlighted Spotify, Alphabet (Google), and Exxon Mobil as potential buys. Meta Platforms, Goldman Sachs, and Granite Construction are also mentioned as strong performers.

- Mutual Funds and ETFs: Mutual funds and exchange-traded funds (ETFs) are a great way to invest in a diversified basket of stocks or other assets. Index funds, in particular, offer immediate diversification and tend to be less risky than individual stocks.

- High-Yield Savings Accounts and CDs: In the current environment, savings accounts and certificates of deposit (CDs) offer attractive returns with relatively low risk. They are suitable for short-term savings or money that you may need to access occasionally.

- Bonds: Bonds can offer a relatively safe and stable form of fixed income. Government bonds are virtually risk-free, while corporate bonds offer higher yields but carry more risk.

- Dividend Stocks: Dividend stocks provide a cash payout and are often associated with stable, profitable companies. They can be a good choice for investors seeking income, such as retirees.

- Value and Small-Cap Stock Funds: Value stock funds invest in bargain-priced stocks, while small-cap stock funds focus on stocks of smaller companies with strong growth prospects. Both types of funds offer the potential for attractive long-term returns but come with higher risk.

- Real Estate: Investing in rental properties or REITs (real estate investment trusts) can provide regular cash flow and the potential for capital appreciation. REIT index funds, in particular, offer diversification and substantial dividends.

High-yield savings accounts

These accounts are ideal for those who need to access cash in the near future, as well as risk-averse investors who want to avoid the possibility of losing their money. They are also a good option for those saving towards a specific goal, such as an emergency fund or a down payment on a new home.

When choosing a high-yield savings account, it's important to consider the interest rate, deposit and balance requirements, fees, and compounding frequency. It's also worth noting that these accounts may have stricter requirements and limitations on withdrawals compared to traditional savings accounts.

• UFB Direct High Yield Savings: 5.25% APY, no monthly fee, no minimum balance requirements
• Laurel Road High Yield Savings: 5.15% APY, no monthly fee, no minimum deposit required
• Varo Savings Account: 3.00% to 5.00% APY, no monthly fee, multiple automated savings tools
• LendingClub High-Yield Savings: 5.00% APY, no monthly fee, $100 minimum deposit
• TAB Bank High Yield Savings: 5.27% APY, no monthly fee, no minimum deposit

Long-term certificates of deposit

CDs are best suited for those who need money at a specific time in the future and can keep their funds locked up in exchange for a higher yield than they would get from a savings account. They are also a good option for risk-averse investors. The longer you're able to leave your money in a CD, the higher the interest rate will be. Common term lengths are one, three, and five years, but you can also find CDs with terms of up to 10 years.

When choosing a CD, consider the annual percentage yield (APY), minimum deposit requirements, compounding schedule, term, early withdrawal penalty, and customer experience. Online banks tend to offer higher interest rates than traditional banks, but it's still worth shopping around to find the best rates and terms for your needs.

Dividend stock funds

Even so, it's a good idea to buy a dividend stock fund with a diversified collection of assets to reduce the risk of relying on any single company. With a dividend stock fund, you can gain on your investment through long-term market appreciation and earn cash in the short term through dividends.

• BlackRock Equity Dividend Instl
• Fidelity High Dividend ETF
• Franklin U.S. Low Volatility Hi Div ETF
• Vanguard Dividend Appreciation ETF
• Vanguard High Dividend Yield ETF

Value stock funds

Value stocks tend to do better as interest rates rise and growth stocks become less attractive on a relative basis. Many value stock funds also pay a dividend, so that's an additional attraction for many investors.

• Vanguard Value Index Fund Admiral Shares (VVIAX)
• Vanguard Selected Value Fund (VASVX)
• Vanguard Small-Cap Value Index Fund Admiral Shares (VSIAX)
• Fidelity New Millennium (FMILX)
• Vanguard S&P 500 Val Index Inst (VSPVX)
• Fidelity Blue Chip Value (FBCVX)

Nasdaq-100 index funds

The best Nasdaq index funds charge a low expense ratio and are a cheap way to own all the companies in the index.

• Shelton NASDAQ-100 Index Direct (NASDX)
• Invesco QQQ Trust ETF (QQQ)

Frequently asked questions