Investing is one way for many people to have a secondary source of income. Business owners and entrepreneurs alike put earnings and savings to make sure that their money keeps growing. If you’re one of the people who are looking to dip their feet into the investment waters for the first time this year, there are different ways you can do it.
However, it’s essential to remember that you should only seek investment options that offer healthy investment portfolio growth.
So, what investments should you make in 2021 if you want to achieve and maintain optimal health for your portfolio? Check out our top five list below.
- Precious Metals
There are various advantages to investments made in precious metals like gold. Obviously, it helps diversify your portfolio. However, some people also believe that precious metals like gold help counteract inflation within an investment portfolio because gold prices typically rise when the dollar weakens. People invest in more precious metals when fears about inflation strike. It drives gold and silver’s value up further.
One of the best ways to invest in precious metals in 2021 is through an IRA (Individual Retirement Account), specifically precious metals IRA. The term precious metals IRA or gold IRA simply refers to an IRA account that’s self-directed. It allows you to invest in precious metals in a tax-advantaged way.
Setting up a gold IRA is a relatively straightforward process. All you need is to work with a gold IRA investment company. Just don’t forget to only engage with reputable companies – those that have already proven themselves competent in the industry. To make sure that you won’t fall into the wrong hands, you should find resources like this Lear Capital review. These online reviews from experienced precious metals IRA investors will help you decide whether or not Lear Capital or other investment companies are worth it.
- REITs (Real Estate Investment Trusts)
A REIT or Real Estate Investment Trust is a company that owns real estate that produces or generates income.
Hotels, hospitals, retail, warehouses, apartments, office, commercial buildings are some of the different REIT types. With REITs, you can invest in a real estate investment trust that is part of a larger-scale investment.
Some types of real estate investment trusts perform better than others. Last year, apartment and industrial REITs produced the best dividend payouts.
Should you still buy stocks this year?
The answer is yes. The truth is investing in stocks is something that should be habitual. Those who want to make their portfolio healthy should regularly invest small amounts of money in the stock market.
Note that creating lasting wealth through stocks means investing in the best and the largest companies worldwide. Over the last century, such a strategy has proven successful.
- ETFs (Exchange-Traded Funds)
ETFs or exchange-traded funds track a popular index to mirror its performance like what an index fund does. However, unlike index funds, exchange-traded funds are traded on the stock market.
Investors have more control over the price they purchase ETFs at because exchange-traded funds are bought and sold on the stock market. That would also mean that your reward depends on how poorly or well the index you have invested your money is performing.
By investing in the S&P 500, one can minimize the risk of exchange-traded funds investing this year.
A new breed of platforms for investments has risen because of the advancement of technology. These new investing platforms are beyond traditional stocks. They’re categorized as alternative investments, and crowdfunding and peer-to-peer lending were the first ones to drive such a renaissance. Note that using similar models, other asset classes have already started to follow last year, and more will follow in 2021.
Some of these alternative investment platforms are still somewhat new, so it’s safe to assume that they may be within the experimental stage at present. However, experts believe that alternative investments like crowdfunded investing will be commonplace approximately 8-10 years from now. Thus, if you want a head start on the investing masses, consider getting in this year.
Everyone’s personal risk tolerance and reasons for investing are different. So, while the investments mentioned and discussed here are the most vital to a healthy portfolio for this year, don’t be afraid to include other investment options so long as they suit your goals best.
If there’s something that investors should always keep in mind, it’s the idea that investing strategies shouldn’t change much every year. It’s best to focus on the 10-year milestone. Doing so will give you a better chance of hitting your investment objectives.