Invest Now: Where To Put Your Money

There are many options for what to invest in right now, depending on your goals and risk tolerance. Here are some of the best options for investments in 2024:

- High-yield savings accounts: These accounts offer a higher rate of return than traditional bank savings accounts and provide easy access to your money.

- Certificates of deposit (CDs): CDs are federally insured savings accounts that offer a fixed interest rate for a defined period, usually one to five years.

- Bonds: Lower-risk government or corporate bonds tend to pay lower interest than higher-risk bonds. Government bonds are considered virtually risk-free but offer lower returns.

- Mutual funds: Mutual funds pool money from multiple investors to purchase stocks, bonds, or other assets and are a cost-effective way to diversify your investments.

- Index funds: These are a type of mutual fund that aims to provide investment returns that match the performance of a specific market index, such as the S&P 500.

- Exchange-traded funds (ETFs): ETFs are similar to mutual funds but are traded on stock exchanges, offering more flexibility and a lower minimum investment.

- Stocks: Stocks offer the potential for higher returns but come with higher risk and volatility.

- Dividend stocks: These stocks provide regular cash payouts and are often associated with stable, profitable companies.

- Robo-advisor portfolios: Robo-advisors use algorithms to build and manage a diversified investment portfolio for you based on your goals and risk tolerance.

- Real estate: Investing in real estate can provide high returns but requires a large amount of capital and hands-on management.

- Alternative assets: This includes investments beyond stocks, real estate, funds, and fixed-income assets, such as private equity, fractional ownership, precious metals, and cryptocurrencies.

High-yield savings accounts

• Interest rate: Look for an account with a competitive annual percentage yield (APY). The national average savings APY is currently 0.46%, so aim for an account that offers at least 10 times that rate.
• Minimum deposit requirement: Some high-yield savings accounts require a minimum opening deposit, which can range from $0 to thousands of dollars.
• Fees: Many high-yield savings accounts have no fees, but some do. Be sure to read the fine print to understand the fee structure before opening an account.
• Compounding interest: Find out how often interest is compounded (daily, weekly, monthly, or annually) as this will impact your earnings over time.
• Online vs. traditional bank: Online banks often offer higher interest rates and lower fees than traditional banks, but they may have fewer products and services. Traditional banks, on the other hand, offer more convenient access to your funds and in-person support.
• Customer service: Consider the different ways you can contact customer support and choose an option that aligns with your communication preferences.
• Account alerts: Some banks offer account alerts via text, which can be helpful for monitoring your savings.
• UFB Direct High Yield Savings: Offers an excellent APY of 5.25% with no monthly fee, no minimum balance requirements, and 24/7 customer support.
• Laurel Road High Yield Savings: Provides a competitive APY of 5.15% with no monthly fees or balance requirements. Laurel Road also offers a checking account and other financial products.
• Varo Savings Account: Offers an APY of 3.00%, which can increase to 5.00% if you meet certain requirements. Varo also provides automated savings tools and a free checking account.
• LendingClub High-Yield Savings: Features a strong APY of 5.00% with no monthly fees and a free ATM card.
• Bask Bank Interest Savings Account: Earn an APY of 5.10% with no monthly fees, minimum deposit, or balance requirements. However, Bask Bank does not offer a checking account or ATM access.
• TAB Bank High Yield Savings: Offers one of the best interest rates at 5.27% APY with no monthly fee and no minimum deposit requirement.

Remember to do your research and compare different accounts to find the best high-yield savings account for your needs.

Certificates of deposit (CDs)

• Interest Rate: Most CD interest rates are fixed, but there are also variable-rate CDs that could earn a higher return if interest rates rise. With a fixed-rate CD, you know exactly how much you'll earn by the end of the term, but you could miss out if rates rise after you're locked in.
• Term: This is the length of time you agree to leave your funds deposited without making withdrawals. Common terms include one, three, and five years.
• Principal: This is the amount you agree to deposit when you open the CD.
• Financial Institution: You can find CDs at banks, credit unions, and brokerages. The bank or credit union will set factors such as early withdrawal penalties and whether the CD will automatically reinvest at maturity.

When considering a CD, it's important to shop around and compare different offers based on the term, interest rate, and early withdrawal penalties. CDs typically offer higher interest rates than savings and money market accounts, but they also require you to lock up your money for a specific term. This can be a useful feature for savers who want to avoid the temptation of spending their savings. However, it's important to note that withdrawing funds early from a CD will incur a penalty.

CDs are a good option if you have cash that you won't need for a few years and want to save for a specific goal or invest conservatively. They are also a good choice if you want to avoid the risk and volatility of the stock and bond markets. While CDs don't offer the same growth potential, they provide stability and a guaranteed rate of return.

Stocks

Tips for Investing in Stocks:

• Do your research: Analyse the company's financial statements, such as revenue, earnings, profit margins and debt-to-equity ratio.
• Understand industry trends: Keep yourself updated with the latest trends in the company's industry through research reports, news and analyst predictions.
• Look into the management: Consider the experience and track record of the company's management team, as their decision-making and leadership can significantly impact the company's success.
• Seek a competitive advantage: Invest in companies with a competitive advantage, such as strong brand recognition or unique intellectual property, as these can give them an edge in the market.
• Evaluate valuation: Assess whether the stock is overvalued or undervalued compared to similar companies in the industry. Use metrics like price-to-earnings ratio, price-to-sales ratio and price-to-book ratio for this.
• Consider dividend yield: Look for stocks that offer decent dividend yields, as these can provide a significant portion of your return on investment over time.
• Manage risks: Evaluate the risks associated with the stock, including the company's debt level, industry volatility and geopolitical risks that could impact its performance.

Top-Performing Stocks:

• Abercrombie & Fitch Co.
• GigaCloud Technology Inc
• Super Micro Computer Inc
• Crowdstrike Holdings Inc
• Robinhood Markets Inc
• Arista Networks Inc (ANET)
• Micron Technology Inc. (MU)
• Western Digital Corp. (WDC)
• Meta Platforms Inc (META)
• British American Tobacco
• Reckitt Benckiser Group
• Anheuser-Busch InBev SA/NV ADR
• Bristol-Myers Squibb
• Alphabet, Inc. (GOOG, GOOGL)
• Spotify Technology S.A. (SPOT)
• The Progressive Corporation (PGR)
• Intuitive Surgical, Inc. (ISRG)

Government bonds

There are two main ways to make money by investing in government bonds. The first is to hold the bonds until their maturity date and collect the interest payments. The second way is to sell the bonds at a price higher than what you initially paid.

Bond prices can rise for two main reasons. Firstly, if the borrower's credit risk profile improves, indicating a higher likelihood of repaying the bond at maturity, the bond price typically increases. Secondly, if prevailing interest rates on newly issued bonds decrease, the value of an existing bond with a higher rate goes up.

When considering investing in government bonds, it is important to keep in mind that they require locking up your money for extended periods. There is also the risk of interest rate changes and issuer default, though this is uncommon. Additionally, the bond market generally has less transparency and lower returns compared to the stock market.

Examples of Government Bonds to Invest In

• 10-Year Treasury Note: This is a benchmark Treasury bond with a fixed rate and a maturity of 30 years.
• I Bonds: Also known as I Savings Bonds, these bonds offer a fixed rate for the life of the bond and a variable rate that resets every six months based on inflation. They pay interest monthly and cannot be traded.
• TIPS (Treasury Inflation-Protected Securities): These bonds offer protection from inflation and can be purchased directly from the government or through ETFs such as the iShares TIPS Bond ETF.

Robo-advisors

However, they have been criticised for their lack of empathy and complexity. They operate on the assumption that you have defined goals and a clear understanding of your financial circumstances, investment concepts, and potential investment outcomes, which is not always the case for investors.

Frequently asked questions