Investing is easy to understand, but it can be hard to know what’s best for you. There are many different types of investments to choose from. Some are better than others, and some are riskier. But the right investment at the right time in the right way can make all the difference.
To help you find your perfect investments, here are 6 of the best investments you can make in 2021.
Top 6 Investments in 2021
GOVERNMENT BOND FUNDS
Even if interest rates rise, you should still hold government bond funds. These funds are fixed-income investments. The best ones generally have a relatively low duration. That means that they don’t suffer much in a rising interest rate environment. But they do outperform cash and stocks.
So this is a key category to focus on as interest rates rise. Right now, the government bond funds have provided a reasonably safe long-term asset. And when interest rates rise in the future, the returns should be higher than they are right now.
DIVIDEND STOCK FUNDS
Dividend stocks, such as consumer products giants and utilities, can generate extra income for you over time, and they’re the type of investment that’s easy to sell. But they’re not for everyone. When investing in dividend stocks, one thing to be careful is that the company won’t just pay you once — it has to keep paying you each year.
This could mean that you have to hold the stock for a long time, and it’s often difficult to know what to do when the dividend rate gets cut as it did at Kraft Heinz. It’s always possible that the dividend will fall, and the share price will decline when it does.
In the long run, dividends can make an investment relatively cheap, but only when you buy a quality company and have a solid financial position.
Stocks are one of the safest investments you can make. If you are conservative, a diversified stock portfolio with many different companies is your best bet. With stocks, you know your money is safe, but you also get the chance to earn some money in the process.
If you are riskier, you can buy individual stocks. This will put a lot more of your money at risk. The best stocks to buy have been around for many years. They have strong companies that have been proven to make a profit over the long run. The companies should be able to grow into the future.
For much of the United States, rental housing has always been the answer to the rising cost of housing. Buying a home is tough when you don’t know how you’ll be able to pay for the mortgage, which is why investing in a rental property allows you to take advantage of the capital gain of the equity in your home while making your monthly payment.
As long as you are reasonably confident that you can manage to hold the property, which you will have to prove with mortgage and tax documentation, you will be able to take the gain.
This will not surprise you, but you’ve likely heard about cryptocurrencies at some point in your life. Bitcoins and other cryptocurrencies have been around for a few years, and more and more people are starting to invest in them.
It’s unclear exactly what cryptocurrencies will become and whether they’ll replace fiat currency one day. But they’re extremely popular and powerful, with over 1,000 cryptocurrencies listed.
The blockchain technology they’re built on guarantees an extremely high degree of anonymity, which makes them ideal for money laundering and other illegal activities. That said, they are gaining in popularity, with billions in investments and millions of people worldwide using them.
PRIVATE EQUITY REAL ESTATE
These types of investments are largely residential. They can be used for rental properties, retail properties, or just making a loan. Because real estate is not publicly traded, you won’t be able to make as much as you could with an index fund or ETF. However, you can still make more than investing in a mutual fund or ETF. There are many firms out there such as Alta Capital, Blackstone, Carlyle Group, KKR & Co, Warburg Pincus, CVC Capital Partners.
The main downside is that returns may vary, depending on the individual real estate markets in which the fund is operating. Additionally, as these investments will always be more volatile than other types of investments, be sure you can handle the ups and downs.
Which type of investments do you prefer to make? What makes one good over the other? What’s the worst thing that ever happened to you because of a bad investment? These are the questions you should consider asking yourself before making a decision, be wise!