Global Bargain Hunting

There are many investment bargains to be found at the moment, but it's important to do your research and understand the risks involved.

If you're looking for lower-risk investments, high-yield savings accounts and certificates of deposit (CDs) are good options. These provide higher interest rates than traditional bank accounts and are federally insured.

For those seeking higher returns, dividend stocks and value stock funds offer good value. Dividend stocks can provide fixed income and growth, while value stock funds are often cheaper than other types of stock funds.

Other options include rental housing, which can provide regular cash flow, and stocks in specific industries, such as tech, healthcare, and construction.

It's important to remember that investing carries risks and you should always do your own research before making any decisions.

High-yield savings accounts

• UFB Direct High Yield Savings: Best for APY at all balance tiers
• Laurel Road High Yield Savings® account: Best for a full banking experience
• Varo Savings Account: Best for automated savings tools
• LendingClub Bank High-Yield Savings: Best for Trustpilot ratings
• Bask Bank Interest Savings Account: Best for no minimum deposit
• TAB Bank High Yield Savings: Best for no monthly fee
• Popular Direct High-yield Savings Account: Best for fully online banking
• First Foundation Online Savings Account: Best for ATM fee reimbursement
• Synchrony Bank High Yield Savings: Best for app ratings

Long-term certificates of deposit

There are several advantages to long-term CDs. Firstly, they offer the highest interest rates of any type of CD, which can help to balance out more volatile investments in your portfolio. Secondly, they are a relatively low-risk investment as they are typically insured by the FDIC for up to $250,000, protecting your money in the event of fraud or a bank collapse.

However, there are also some disadvantages to consider. The main one is that your money is tied up for several years, and if you withdraw it early, you will likely incur a penalty. During this time, there is also a risk that inflation or interest rates will rise, reducing the value of the interest you earn. Additionally, by investing in a long-term CD, you lose out on the potential for higher returns from the stock market.

Overall, long-term CDs can be a good option for those seeking a predictable rate of return and a relatively low-risk investment. However, it's important to carefully consider the trade-offs involved, including the lack of access to your money for an extended period.

Long-term corporate bond funds

Investment-grade long-term bond funds often reward investors with higher returns than government and municipal bond funds. But the greater rewards come with some added risk.

You can buy and sell corporate bond funds with any broker that allows you to trade ETFs or mutual funds. Most brokers allow you to trade ETFs for no commission, whereas many brokers may require a commission or a minimum purchase for a mutual fund.

• SPDR® Portfolio Long Term Corp Bd ETF
• IShares 10+ Year Invmt Grd Corp Bd ETF
• Vanguard Long-Term Corporate Bd ETF
• Invesco Taxable Municipal Bond ETF
• IShares Core 10+ Year USD Bond ETF
• Vanguard Long-Term Bond ETF

Dividend stock funds

When choosing a dividend fund, it is important to assess your investment goals, risk tolerance, and financial situation. Dividend income funds focus on dividend yield or income, while dividend growth funds invest in stocks that consistently increase their dividends over time, signalling overall resilience and future growth. Dividend growth and income funds strike a balance between the two.

Additionally, investors should consider whether they prefer a passively or actively managed fund. Passively managed funds offer lower fees but have less flexibility in responding to market shifts, while actively managed funds provide more leeway for the fund manager to modify the fund to align with investors' expectations.

Some examples of dividend funds include the Vanguard Dividend Appreciation ETF and the Vanguard High Dividend Yield ETF.

Overall, dividend stock funds offer reliability and convenience for investors, providing a stable income stream and resilience during market downturns.

Value stock funds

Understanding Value Stocks

Value investing involves buying stocks of companies that are trading at a lower price than their intrinsic value. These companies are often established businesses with solid fundamentals, stable revenues, and steady growth rates. Value stocks tend to be less volatile than growth stocks and are usually mature businesses with reliable dividend payments.

Examples of Value Stock Funds

• Vanguard Value ETF (VTV): This ETF tracks the CRSP US Large Cap Value Index and holds about 350 stocks, including Berkshire Hathaway, Broadcom, JPMorgan Chase, and Exxon Mobil. It has a low expense ratio of 0.04% and a dividend yield of 2.4%.
• IShares Russell 1000 Value ETF (IWD): The IWD ETF tracks the Russell 1000 Value Index and provides exposure to undervalued large and mid-cap US stocks. It has an expense ratio of 0.19% and a dividend yield of 1.9%. Top holdings include Berkshire Hathaway, Exxon Mobil, and Johnson & Johnson.
• Vanguard Small-Cap Value ETF (VBR): With over 800 stocks, this ETF tracks the CRSP US Small Cap Value Index. It has an expense ratio of 0.07% and a dividend yield of 2.1%. Top holdings include Carlisle Companies, Booz Allen Hamilton, and Builders FirstSource.
• Vanguard Mid-Cap Value ETF (VOE): The VOE ETF tracks the CRSP US Mid Cap Value Index and holds about 200 stocks. It has an expense ratio of 0.07% and a dividend yield of 2.2%. PACCAR, Arthur J. Gallagher & Co, and Carrier Global are among its top holdings.
• Fidelity High Dividend ETF (FDVV): This ETF invests in large and mid-cap companies expected to pay and grow dividends. It holds about 100 stocks with a 3.1% dividend yield. Top holdings include Nvidia, Microsoft, Apple, and Broadcom.
• Individual Stocks: Besides ETFs, you can also consider individual value stocks like Procter & Gamble, Coca-Cola, JPMorgan Chase, Johnson & Johnson, and Altria Group. These companies have strong fundamentals, stable businesses, and a history of dividend payments.

Remember, when investing in value stock funds, it's important to conduct thorough research and consider factors such as the fund's expense ratio, diversification, and long-term performance.

Frequently asked questions