Invest Now: Where To Put Your Money

There are many options for investing your money, and the best choice for you will depend on your goals and risk tolerance. Here are some of the best investments you can make right now:

- High-yield savings accounts: These accounts offer higher interest rates than traditional savings accounts, and your money is easily accessible.

- Certificates of deposit (CDs): CDs are a type of federally insured savings account that offers a fixed interest rate for a defined period. They are ideal if you know you'll need the money at a specific time in the future.

- Bonds: Lower-risk bonds, such as government or corporate bonds, offer lower interest rates than higher-risk bonds but are a relatively safe form of investment.

- Mutual funds: Mutual funds pool money from multiple investors to purchase stocks, bonds, or other assets. They are a convenient and inexpensive 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. They tend to be more cost-effective and less volatile than actively managed funds.

- Exchange-traded funds (ETFs): ETFs are similar to mutual funds but are traded on stock exchanges, and shares can be bought and sold throughout the day. They are ideal for investors who want to invest in a diversified portfolio but don't have enough money to meet the minimum investment requirements for mutual funds.

- Stocks: Stocks offer the potential for higher returns but also come with higher risk. It's important to diversify your portfolio and limit individual stock holdings to 10% or less of your overall portfolio.

- Dividend stocks: These stocks pay out regular cash dividends and are often associated with stable, profitable companies. They can provide both fixed income and growth potential.

- Robo-advisor portfolios: Robo-advisors use algorithms to build and manage a diversified investment portfolio for you based on your goals, time horizon, and risk tolerance. They are a good option if you don't want to actively manage your investments.

- Real estate: Investing in real estate can be a great long-term investment, but it requires a large amount of capital and hands-on management. An alternative is to invest through real estate crowdfunding platforms or REITs, which offer professional property management.

- Alternative assets: This category includes investments beyond stocks, real estate, funds, and fixed-income assets, such as private equity, fractional ownership of real property, precious metals, and cryptocurrencies. Alternative assets can provide enhanced diversification and return potential but carry higher risk.

High-yield savings accounts

UFB Direct High Yield Savings

UFB Direct is an online division of FDIC-insured Axos Bank. It offers an excellent APY of 5.25% with no monthly fee, no minimum balance requirements, and all balance tiers earn the top rate. You also get a complimentary ATM card that you can use at 91,000 ATMs nationwide. UFB Direct has 24/7 customer support available and highly-rated Apple and Google apps.

Laurel Road High Yield Savings® account

Laurel Road is an FDIC-insured digital banking platform owned by KeyBank. It provides a competitive APY of 5.15% with no monthly account fees or balance requirements. There is no minimum deposit needed, and linking your savings account to your Laurel Road checking account can provide overdraft protection. The bank's mobile app has excellent ratings, but customer service is not available on weekends.

Varo Savings Account

The Varo Savings Account offers an APY of 3.00%, but you can earn 5.00% on balances up to $5,000 if you meet certain requirements, such as having a Varo Bank Account and receiving direct deposits of at least $1,000 per month. Varo offers over 40,000 Allpoint ATMs nationwide for free withdrawals and has highly-rated mobile apps. It also provides multiple automated savings tools to help you save effortlessly.

LendingClub Bank High-Yield Savings

LendingClub's High-Yield Savings account offers a strong APY of 5.00% on your entire balance, with no monthly fees. You only need a $100 minimum to open an account, and there is no minimum required balance after that. You can access your money at over 37,000 MoneyPass or SUM ATMs for free using LendingClub's ATM card. The bank has excellent customer reviews on Trustpilot, with an average rating of 4.7 stars.

Bask Bank Interest Savings Account

Bask Bank, an online-only financial institution, offers an APY of 5.10% with no monthly account fees, minimum balance, or deposit requirements. However, Bask Bank doesn't offer a debit or ATM card, so you must rely on electronic transfers to access your money. The bank has mixed reviews on Trustpilot, Google Play, and the Apple App Store.

TAB Bank High Yield Savings

TAB Bank's High Yield Savings offers an impressive APY of 5.27%, and all balances receive the promotional rate with no minimum deposit required to open the account. TAB Bank is an online-only bank with highly-rated mobile apps. However, there are certain transactional and other fees that could lower your returns, such as outgoing wire transfers, stop payments, overdrafts, and paper statements.

Certificates of deposit (CDs)

When you open a CD, you agree to keep your money in the account without making any withdrawals for a specified length of time, known as the term. Terms can vary from 3-, 6-, or 12-months to 4-, 5-, and even 10-year terms. Generally, the longer the term, the higher the interest rate. At the end of the term, you can withdraw your money penalty-free. Withdrawing money early usually results in a penalty fee.

CDs are a good option for those who want to save for a specific goal or project and will not need to access the money until that time. For example, if you are saving for a down payment on a house that you plan to purchase in five years, you could put your money in a five-year CD and benefit from the higher interest rate.

CDs can be purchased directly from banks and credit unions, or through brokerage firms and independent salespeople, known as "deposit brokers". It is important to thoroughly research the background of the issuer or deposit broker to ensure that the CD is from a reputable institution.

When shopping for a CD, it is important to compare different offers by looking at the term, the interest rate, and the penalty for early withdrawal. Additionally, be sure to read the fine print carefully and understand the limitations and benefits of this type of investment. While CDs are considered safe and stable, your money may be locked in at a low interest rate if rates rise during the term.

Stocks

When it comes to investing in stocks, there are a few things to keep in mind. Firstly, it's important to do your research and consider factors such as a company's financial health, industry trends, management decisions, competitive advantage, valuation, dividend yield, and risks. Here are some specific stock recommendations and things to consider:

Best Stocks to Buy Now:

• Meta Platforms (META): Meta Platforms, the parent company of Facebook, Instagram, and other social media platforms, has a strong technical front and is investing in artificial intelligence. It has a near-perfect IBD Composite Rating of 98.
• Goldman Sachs (GS): Goldman Sachs is a leading global investment banking and financial services company. It has a strong overall performance reflected in its IBD Composite Rating of 97.
• Granite Construction (GVA): Granite Construction is benefiting from the 2021 infrastructure bill and has a strong backlog of work, acquisitions, and pricing. It has a perfect Composite Rating of 99.
• Universal Health Services (UHS): Universal Health Services operates hospitals and health centers across the US and has a strong IBD Composite Rating of 97.
• Booking (BKNG): Booking is a leading online travel and experience booking platform. It has strong earnings performance and is attracting the attention of institutional investors.
• Spotify Technology (SPOT): Spotify is the largest independent provider of streaming music content and is expanding into podcasts and other audible content. Bank of America has a "buy" rating for this stock.
• Alphabet Inc. (GOOG, GOOGL): Alphabet is a global leader in internet search and online advertising and is the parent company of Google. Its upcoming AI capabilities could serve as a catalyst for the stock.
• Intuitive Surgical, Inc. (ISRG): Intuitive Surgical develops robotic and computerized technologies for minimally invasive surgeries. Its new da Vinci 5 system could drive earnings estimates and justify a premium valuation.
• Tapestry, Inc. (TPR): Tapestry designs and markets luxury accessories and fragrances under brands like Coach, Kate Spade, and Stuart Weitzman. Its stock is considered undervalued relative to its margin profile and cash flow generation.

Other Considerations:

• Growth Stocks vs. Dividend Stocks: Growth stocks focus on revenue growth and typically don't pay dividends, while dividend stocks provide consistent dividend payments.
• Risk and Time Horizon: Your risk tolerance and investment time horizon are crucial factors in deciding how much to invest in stocks. If you have a long-time horizon, you may be able to take on more risk.
• Index Funds and ETFs: Instead of picking individual stocks, consider investing in index funds or exchange-traded funds (ETFs) that track a stock market index or a specific industry. This provides instant diversification and lowers your risk.

Bonds

There are three main types of bonds:

Corporate Bonds

These are issued by private and public corporations to raise capital for initiatives like expansion and research and development. The interest earned from corporate bonds is taxable, but these bonds usually offer higher yields than government or municipal bonds to compensate. The risk and yield of corporate bonds vary depending on the likelihood of the company going out of business.

Municipal Bonds ("Munis")

Municipal bonds are issued by states, cities, counties, or other government entities to raise money for public projects such as schools, roads, and hospitals. The interest earned from municipal bonds is generally exempt from federal income tax and may also be exempt from state and local taxes for residents of the issuing state. There are two types of municipal bonds: general obligation bonds, which are payable from taxes or the issuer's general fund, and revenue bonds, which are backed by revenues from a specific project, such as highway tolls.

Treasury Bonds ("T-bonds")

Issued by the US Department of the Treasury, these bonds are backed by the full faith and credit of the US government, making them a safe and popular investment. While they are subject to federal tax, they are exempt from state and local taxes. Treasury bills mature in under a year, notes mature within ten years, and bonds mature in over ten years, typically thirty, paying interest every six months.

Benefits of Investing in Bonds

• Capital preservation: Bonds are generally less risky than stocks, making them a good option for investors who want to protect their investment and have less time to recoup losses.
• Income generation: Bonds provide regular, fixed income through coupon payments.
• Diversification: Investing in a mix of stocks and bonds can help build a resilient portfolio that seeks returns while managing risk.
• Risk management: Fixed-income assets like bonds are generally less sensitive to macroeconomic risks and tend to be less volatile than stocks.
• Invest in a community: Municipal bonds allow investors to contribute to community development projects like building hospitals or schools.

Risks of Investing in Bonds

• Interest rate risk: When interest rates rise, bond prices fall, and bonds can lose value.
• Inflation risk: If the rate of inflation exceeds the fixed income provided by a bond, the investor loses purchasing power.
• Credit risk: There is a possibility that the issuer might default on their debt obligation.
• Liquidity risk: An investor might want to sell a bond but be unable to find a buyer.
• Call risk: The issuer might retire a bond before its maturity date if interest rates decline.

Buying Bonds

Unlike stocks, bonds are not publicly traded on an exchange. They are traded over the counter, which means you need to buy them from brokers. However, US Treasury bonds can be bought directly from the government.

Real estate

Getting Started in Real Estate:

When investing in real estate, it is crucial to have a substantial sum of money available. The bank's money can then be borrowed to finance the majority of the investment, which is then repaid over time.

Pros of Investing in Real Estate:

One of the main benefits of investing in real estate is the potential for high returns. If you select a good property and manage it well, you can earn many times your initial investment. Additionally, real estate is often considered a passive investment, meaning you may not have to put in a lot of effort to maintain it.

Another advantage is the numerous tax benefits available to property owners. For example, if you pay off the mortgage on a property, you can enjoy greater stability and cash flow, making rental properties an attractive option for older investors.

Cons of Investing in Real Estate:

One of the main risks of investing in real estate is the potential for high losses. If something happens to the property, you will have a lot of money tied up in a single asset, and your lack of diversification can create financial problems.

Another potential downside is the active management required if you rent out the property. This can include tasks such as finding tenants, handling maintenance issues, and collecting rent.

Tips for Investing in Real Estate:

• It is important to do your research and understand the market before investing.
• Consider investing in emerging neighbourhoods, which offer growth potential and tax incentives for buyers.
• Diversify your investments across different geographical areas to minimise the volatility of local markets.
• Be prepared for unexpected costs and have a rainy-day fund to cover maintenance and repair expenses.
• Understand the crime rates and other factors that may affect the desirability of the location.
• Consider joining a local networking group or seeking advice from real estate professionals to stay informed and make connections.

Alternative Ways to Invest in Real Estate:

If you want to invest in real estate without owning physical property, there are alternative options available:

• REITs (Real Estate Investment Trusts): These are securities that can be purchased through a brokerage account, similar to investing in mutual funds. REITs tend to pay high dividends, making them a common retirement investment.
• Online Real Estate Platforms: These connect investors to real estate projects, allowing them to finance projects through debt or equity. However, this option may require a substantial initial investment and carries significant risks.
• Rental Properties: Buying a property to rent out is a traditional way to invest in real estate, but it requires active management and can be time-consuming.
• House Flipping: This involves investing in an underpriced home, renovating it, and then reselling it for a profit. While this can be lucrative, it is important to accurately estimate renovation costs and be prepared for potential risks.

Final Thoughts:

Frequently asked questions