Americans typically name real estate and stocks (or stock-based ETFs and mutual funds) as their go-to investments, yet these do not come without risk.
There is good news: there are multiple investments with proven track records of success that offer reliable returns. Depending on your investing timeline and goals, some may be smart or risky options; all have the ability to grow wealth over time.
Real estate can provide investors with a safe haven, since its tangible asset can’t vanish overnight like stocks or currency. Bankable real estate investments also enable you to leverage funds for quicker portfolio growth; though real estate’s growth may take longer than other forms of investing, real estate provides great returns that help secure wealth for the future.
Graham recommends that investors seeking safer returns should invest in REITs that invest in single-family homes, given a severe housing shortage. Due to higher rental yields offered by such properties and as an added benefit serving as an inflation hedge since rents tend to keep pace with (or exceed) inflation.
Gold can be an attractive investment during times of economic instability, often increasing in value over time and boasting low correlation with stocks and bonds to reduce portfolio risk. Unfortunately, unlike stocks or real estate investments, it doesn’t produce regular cash flows like stocks do and purchasing physical gold may incur storage and insurance fees that require frequent payments from investors who hold onto it.
Investors seeking exposure to gold without the hassle of storage may opt for shares in companies that mine or finance its production, like Newmont and Barrick Gold, but these investments carry significant risk that should be carefully assessed against potential rewards. ETFs and mutual funds that track its price provide less-risky alternatives that make investing simpler; futures contracts and options provide leveraged exposure but may require expertise – potentially too volatile for novice investors.
Stocks make an excellent investment option because when you purchase shares of a company, you legally own a portion of that business and, by investing in its shares, become part of its earnings per share (EPS) directly linked to its success.
Even though stocks do carry some degree of risk, historically speaking they have historically provided higher returns than bonds, savings accounts or precious metals over extended timeframes. Your goal should be to maximize growth while protecting assets against fluctuations.
There are currently many exciting investment opportunities on the market, especially cyclical stocks. One company to consider is Duke Energy, with over 7.7 million electricity customers and 1.6 million natural gas customers; consumers tend to reduce spending during recessionary times but still pay their utility bills, making DUK an effective recession play. ASML owns a global monopoly over tools used for microchip production used by auto manufacturers, medical device makers, and tech giants who cannot get enough microchips produced by ASML’s tools.
Savings accounts and certificates of deposit (CDs) offer predictable, guaranteed returns on your money that are lower than what can be seen on the stock market but less risky than more aggressive investments.
CDs can be an excellent way to secure funds you may require within three years, such as down payments on homes and cars, emergency expenses or college tuition payments.
As savings account and CD rates reach their highest levels in 22 years, now is an excellent time to shop around for the highest savings account and CD rates available. Look for banks or credit unions with federally insured accounts offering competitive APYs without incurring fees – then compare each to find what fits best!