Invest Now: Where To Put Your Money

There are many options for where to invest your money right now, but the best approach depends on your risk tolerance, the amount of money you have to invest, and your time horizon.

For most people, the best way to invest is with a combination of stock-based and fixed-income investments. Stocks have consistently proven to be the best way for the average person to build wealth over the long term. For example, U.S. stocks have delivered better returns than bonds, savings accounts, precious metals, and most other investment types over the past four decades.

If you're worried about researching and selecting individual stocks, you could invest in exchange-traded funds (ETFs) and/or mutual funds. ETFs are traded on major stock exchanges, and you can buy shares whenever the stock market is open. Mutual funds, on the other hand, only price their shares once a day and aren't as liquid.

If you have a lower risk tolerance, you could consider fixed-income investments like bonds, which are loans to a company or government. There are three main kinds of bonds: corporate bonds, municipal bonds, and treasury notes.

Another option is to invest in real estate, either by buying a rental property or through alternative ways such as real estate investment trusts (REITs).

Finally, if you're looking for a more hands-off approach, you could open an account with a robo-advisor, which will automatically create an investment portfolio for you based on your goals and risk tolerance.

High-yield savings accounts

My Banking Direct

My Banking Direct offers an impressive 5.55% APY, with no monthly fee and only $1 needed to earn the APY. It requires a minimum opening deposit of $500.

UFB Direct

UFB Direct is an online bank and a division of Axos Bank. It offers a competitive rate of 5.25% APY, with no minimum deposit requirement and zero monthly fees.

Bread Savings

Bread Savings offers an APY of 5.15%. It requires a minimum deposit of $100.

Bask Bank

Bask Bank offers an APY of 5.10%.

Popular Direct

Popular Direct offers an APY of 5.05%.

CIBC U.S.

CIBC U.S. offers an APY of 5.01%.

Salem Five Direct

Salem Five Direct offers an APY of 5.01%.

LendingClub

LendingClub offers an APY of 5.00%.

Exchange-traded funds (ETFs)

ETFs have lower fees and expenses compared to mutual funds and stocks. They offer low expense ratios, and investors can benefit from fewer broker commissions when buying the stocks individually. ETFs are also more tax-efficient than mutual funds, as most buying and selling occur through an exchange, keeping tax costs lower. Additionally, ETFs provide risk management through diversification, and there are ETFs that focus on targeted industries, such as technology, healthcare, or energy.

When investing in ETFs, it is important to consider the disadvantages. These include trading costs, illiquidity, and tracking errors. Thinly traded ETFs may have wide bid-ask spreads, resulting in unfavourable buy and sell prices. It is crucial to carefully investigate any ETF before investing and to utilise tools such as ETF screeners to narrow down the options based on criteria like trading volume, expense ratio, past performance, holdings, and commission costs.

ETFs are available on most online investing platforms, retirement account provider sites, and investing apps, many of which offer commission-free trading. After creating and funding a brokerage account, investors can search for and buy ETFs that align with their investment goals and strategies.

Dividend stocks

When investing in dividend stocks, there are a few key dates to be aware of. The announcement date is when the company management announces the dividend, which must then be approved by the shareholders. The ex-dividend date is the cut-off date to get paid the declared dividend, usually one day before the record date when a list of eligible shareholders is compiled. To receive the dividend, an investor must be on the company's shareholder books before the ex-dividend date.

There are different types of dividends, and the amount paid out can vary by company. Some companies may offer special dividends, which are one-off bonuses outside of regular dividends. Dividend reinvestment programs (DRIPs) allow investors to reinvest their dividends back into the company.

When investing in dividend stocks, it is important to do your research and consider factors such as the company's earnings, financial health, and dividend growth history. Dividend stocks can be found in various industries, including tech, healthcare, banks, financial companies, and oil and gas.

Overall, dividend stocks can be a great option for investors seeking a combination of fixed income and growth potential, particularly those looking for more stability and regular cash payouts.

Real estate

For those who want to be their own boss, owning a property can give them that opportunity, and there are numerous tax laws that benefit owners of property. However, while real estate is often considered a passive investment, it may require quite a bit of active management if you're renting the property.

Any time you're borrowing significant amounts of money, you're putting extra stress on an investment turning out well. But even if you buy real estate with all cash, you'll have a lot of money tied up in one asset, and that lack of diversification can create problems if something happens to the asset.

And even if you don’t have a tenant for the property, you’ll need to keep paying the mortgage and other maintenance costs out of your own pocket.

While the risks can be high, the rewards can be quite high as well. If you’ve selected a good property and manage it well, you can earn many times your investment if you’re willing to hold the asset over time.

A simpler way to invest in real estate is through real estate crowdfunding platforms. These platforms allow you to invest in property while getting the benefit of professional property management.

Another way is to invest in real estate investment trusts (REITs). REITs are funds that invest primarily in commercial real estate, including office buildings, retail spaces, and large apartment complexes. REITs trade like stocks and generally offer high dividend yields, as well as the potential for capital appreciation.

Overall, real estate investing requires careful consideration and diligence. It is a long-term commitment that can provide significant returns with proper management.

Cryptocurrencies

Bitcoin is the most popular cryptocurrency and the first to be created, dating back to 2009. It is also the largest by market capitalization, with a valuation of about $1.3 trillion, or roughly 53% of the overall market. It has the most mainstream acceptance of any cryptocurrency and is accepted by many businesses, including Visa and Tesla.

Ethereum is the second-largest cryptocurrency by market capitalization, accounting for nearly 18% of the total market. It is both a cryptocurrency and a blockchain platform that is widely used for creating decentralised applications and smart contracts.

Other cryptocurrencies worth considering include:

• Tether: A stablecoin whose value is tied to the US dollar, making it less volatile than other cryptocurrencies.
• Binance Coin: A cryptocurrency that can be used to trade and pay fees on the Binance exchange platform.
• Solana: A blockchain platform that facilitates the creation of decentralised applications and has a faster transaction speed and lower fees than Ethereum.
• Cardano: A blockchain that improves its development to stay ahead of hackers and has a smaller footprint, making transactions faster and cheaper.
• Polkadot: A cryptocurrency created by Ethereum leaders who broke away, with a better network that has several "lanes" for completing transactions.
• Ripple: A cryptocurrency that facilitates international transactions in seconds, with contracts with big banks around the world.
• Litecoin: A cryptocurrency that completes transactions four times faster than Bitcoin and was the first to complete a Lightning Network transaction.
• Chainlink: A cryptocurrency with an appealing price, available for trading on Coinbase.
• Stellar: A decentralised network that can convert and trade any currency across channels, making transactions cheaper and faster than traditional banks.

When investing in cryptocurrencies, it is important to consider factors such as the speed of transactions, associated fees, and the ability to use the cryptocurrency for regular purchases and bank transfers. It is also crucial to remember that cryptocurrency is a long-term investment and not a get-rich-quick scheme.

Frequently asked questions