The Future Of Investing: Funds To Focus On

When it comes to investing, there are a variety of options to choose from, each with its own level of risk and potential return. From safe choices such as high-yield savings accounts and money market accounts to medium-risk options like corporate bonds, and even higher-risk picks like stock index funds, there is something for everyone depending on their financial goals and risk tolerance.

One popular option for those looking to future-proof their finances is hybrid funds, which offer a balanced mix of growth and stability by investing in both stocks and bonds. These funds aim to provide regular income through interest payments and capital growth, making them attractive to those seeking a steady income while also participating in the stock market.

Another option to consider is index funds, which are passively managed funds that aim to replicate the performance of a specific market index, such as the S&P 500. These funds are often well-diversified and have low expense ratios, making them a good choice for long-term investors.

Additionally, investors can choose from a range of stock funds, bond funds, dividend stocks, and target-date funds, each with its own benefits and risks.

When deciding which funds to invest in, it is crucial to consider your financial goals, risk tolerance, time horizon, and investment strategy. Diversification is also key to managing risk and ensuring a well-rounded portfolio.

High-yield savings accounts

• SoFi Checking and Savings: This account offers an APY of 4.50% and has no minimum balance requirement.
• CIT Bank Platinum Savings: This account offers an APY of 4.70% on balances of $5,000 or more.
• Capital One 360 Performance Savings: This account has no minimum balance requirement and offers an APY of 4.10%.
• UFB Portfolio Savings: This account has no monthly maintenance fee and no minimum deposit, offering an APY of 4.83%.
• Barclays Tiered Savings Account: This account has no minimum balance requirement and offers an APY of 4.50% for balances of $0 to $250,000 and 4.80% for balances of $250,000 or more.

When choosing a high-yield savings account, it is important to consider the APY, monthly fees, minimum balance requirements, and withdrawal limits. These accounts are a great way to boost your emergency fund and are ideal for those who want their savings to grow.

Long-term certificates of deposit

When you open a CD, you agree to leave a certain amount of money deposited in the bank for a fixed period, known as the term. This can range from 3 months to 5 years or more, and you'll be paid interest at regular intervals during this time. Once the CD matures, you get back your original investment plus the interest it has accrued.

CDs are a good option if you want to save for a specific goal, such as a new home or a car, or if you want to invest some of your savings more conservatively. They're also a good choice for retirees who don't need immediate income and can lock up their money for a fixed period.

It's important to remember that CDs usually come with early withdrawal penalties, so you'll want to be sure you won't need the money before committing to a CD. Additionally, while CDs generally offer higher interest rates than savings accounts, they may earn less than stocks and bonds over time.

When choosing a CD, consider factors such as the interest rate, term length, minimum deposit, fees, and whether the CD offers any bump-up options or other benefits. You'll also want to shop around for the best rates, as these can vary widely between banks and credit unions.

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 to buy a mutual fund.

When it comes to investing in long-term corporate bond funds, it is important to consider your financial goals, risk tolerance, and time horizon. These funds are suitable for those with a long-term investment horizon, typically at least three to five years, as they can fluctuate in value over time. It is also important to diversify your portfolio and not put all your eggs in one basket.

Dividend stock funds

When choosing dividend stocks, it is important to opt for companies with a solid history of dividend increases rather than those with the highest current yield, as this could be a sign of impending trouble. Even well-regarded companies can be hit by a crisis, so it is always a good idea to diversify your portfolio to reduce reliance on any single company.

Dividend-paying stocks can be purchased individually or as part of a fund. Funds are a good option for those who want to reduce their risk and can be purchased as either exchange-traded funds (ETFs) or mutual funds. ETFs are typically more advantageous as they often have no minimum purchase amount and are commission-free, whereas mutual funds may require a minimum purchase and sometimes charge a commission.

• Invesco Diversified Dividend Y
• BlackRock Equity Dividend Instl
• Fidelity High Dividend ETF
• Invesco Dividend Income R5
• Franklin U.S. Low Volatility Hi Div ETF
• Vanguard Dividend Appreciation ETF (VIG)
• Vanguard High Dividend Yield ETF (VYM)
• Schwab US Dividend Equity ETF (SCHD)
• SPDR S&P Dividend ETF (SDY)
• IShares Select Dividend ETF (DVY)
• ProShares S&P 500 Dividend Aristocrats ETF (NOBL)

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 dividends, which is an additional attraction for many investors.

• Vanguard Value ETF (VTV)
• IShares Russell 1000 Value ETF (IWD)
• Vanguard Small-Cap Value ETF (VBR)
• Vanguard Mid-Cap Value ETF (VOE)
• Fidelity High Dividend ETF (FDVV)
• SPDR Russell 1000 Yield Focus ETF (ONEY)

Frequently asked questions