Investments are the smart way to earn a return on the capital you’ve worked hard to save. Whether you’re interested in stocks, bonds, or cryptocurrency, such as Bitcoin or Ethereum, there are plenty of ways to double or even triple your initial capital. When it comes to investments, here’s what you need to know.
Stocks
Traditionally, the stock market is where people turn when they’re looking for investments that deliver high returns. You can open your own account with an online app, such as Robin Hood or WeBull. On the other hand, you can leave your money in the hands of an experienced professional and let them manage your money according to your goals and your level of risk-aversion. When it comes to stocks, there are two major options you can choose:
- Dividend stocks
- Growth stocks
Dividend Stocks
Dividend stocks are one type of investment, and they’re picked because they generally have a lower risk than growth stocks. This doesn’t mean that you can’t lose your money; it’s still entirely possible for the value of your stock to decrease. The major benefit of a dividend stock is that it pays you a regular return on your initial investment. While dividend stocks give you a set return on your investment, the amount you receive depends on the individual stock. Most dividend stocks pay between 4% and 8% per year. Some pay higher, and some of the new high-yield dividend stocks that rely on options may pay a dividend that’s up to 70% per year.
Growth Stocks
Growth stocks are ones that are geared towards increasing the overall value of the stock and the underlying company. Some of the most common growth stocks include the Magnificent Seven:
- Nvidia (NVDA)
- Meta Platforms (META)
- Amazon (AMZN)
- Google (GOOG)
- Apple (APPL)
- Microsoft (MSFT)
- Tesla (TSLA)
The Magnificent Seven stocks are known for delivering among the highest returns to investors. While some argue that the Magnificent Seven stocks are currently overpriced, others still buy them on a regular basis. The Magnificent Seven stocks have progressed to the point that some of these companies provide a minimal dividend.
Bonds
If you’re averse to risk and hate watching your money disappear into thin air as the stock market declines whenever President Trump says, “tariffs,” you may be more interested in the benefits of bonds. Bonds are issued and backed by the federal government, and they deliver a set percentage return. This return is usually locked in when you purchase the bond, and it may be up to 8%. Because the value of the bonds is pre-determined, you don’t have to worry about losing any of your initial investment, but you’ll also miss out on the opportunity for the stock market’s higher returns. Either way, bonds are a great addition to your portfolio because they help you diversify away from risk. In case something drastic happens, such as a war, bonds won’t drop like stocks will, so you’ll still have a portion of your capital that is safe.
Picking Stocks
If you’re more interested in picking your own stocks, there are plenty of options available. You can download one of the many apps that are dedicated to investors. After depositing your money into the app’s account, you can buy and sell any stocks. There’s an important caveat if you’re interested in buying and selling stocks on your own. Day trading is when you open and close a position on the same market day. The federal government has specific rules that apply to day traders. If you make more than three day trades in five business days, you’ll need to maintain an account balance of at least $25,000. Day trading is a viable option for your investments, but you may want to learn more about the stock market before committing your capital.
Long-Term Investing
Day trading is one way to invest in your future, but it can be stressful. If you’re interested in increasing your nest egg, you may appreciate the “Invest it and forget it strategy.” Find a reputable company that you know isn’t going out of business and invest your capital there. You can forget about looking at the stock markets every day; you only need to look at your statement on an annual basis. This is the relaxing way to invest in your future. You won’t need to worry about getting stressed out and sell your stocks only to see them rise again as soon as you’ve completed your sale.
Mutual Funds
While picking stocks is one way to invest in the stock market, you may want to learn more about the benefits of mutual funds. These funds include several stocks so that your risk is reduced. Because you own multiple companies, the effect of each individual stock is minimized. In other words, one stock can drop in value, but this one drop won’t have an overly significant impact on your portfolio. On the other hand, if your entire portfolio is invested in a single company, you may lose your entire investment should the stock tank. Many people recommend mutual funds to beginning investors or those who have a limited understanding of the markets. You can invest in a particular sector, or you can pick a broader fund that tracks the Dow Jones or the NASDAQ. Either option has benefits, and you can choose multiple mutual funds for your portfolio.
Investments are the smart way to make your money work for you. While interest rates are higher than they’ve ever been, you’ll still make more money by investing in stocks than you’ll make from leaving your money in the bank. The most you’ll get from a CD or savings account is 8%. Invest in stocks or a mutual fund, and you may see returns that are more than 20%.
Investments are the smart way to earn a return on the capital you’ve worked hard to save. Whether you’re interested in stocks, bonds, or cryptocurrency, such as Bitcoin or Ethereum, there are plenty of ways to double or even triple your initial capital. When it comes to investments, here’s what you need to know.
Stocks
Traditionally, the stock market is where people turn when they’re looking for investments that deliver high returns. You can open your own account with an online app, such as Robin Hood or WeBull. On the other hand, you can leave your money in the hands of an experienced professional and let them manage your money according to your goals and your level of risk-aversion. When it comes to stocks, there are two major options you can choose:
- Dividend stocks
- Growth stocks
Dividend Stocks
Dividend stocks are one type of investment, and they’re picked because they generally have a lower risk than growth stocks. This doesn’t mean that you can’t lose your money; it’s still entirely possible for the value of your stock to decrease. The major benefit of a dividend stock is that it pays you a regular return on your initial investment. While dividend stocks give you a set return on your investment, the amount you receive depends on the individual stock. Most dividend stocks pay between 4% and 8% per year. Some pay higher, and some of the new high-yield dividend stocks that rely on options may pay a dividend that’s up to 70% per year.
Growth Stocks
Growth stocks are ones that are geared towards increasing the overall value of the stock and the underlying company. Some of the most common growth stocks include the Magnificent Seven:
- Nvidia (NVDA)
- Meta Platforms (META)
- Amazon (AMZN)
- Google (GOOG)
- Apple (APPL)
- Microsoft (MSFT)
- Tesla (TSLA)
The Magnificent Seven stocks are known for delivering among the highest returns to investors. While some argue that the Magnificent Seven stocks are currently overpriced, others still buy them on a regular basis. The Magnificent Seven stocks have progressed to the point that some of these companies provide a minimal dividend.
Bonds
If you’re averse to risk and hate watching your money disappear into thin air as the stock market declines whenever President Trump says, “tariffs,” you may be more interested in the benefits of bonds. Bonds are issued and backed by the federal government, and they deliver a set percentage return. This return is usually locked in when you purchase the bond, and it may be up to 8%. Because the value of the bonds is pre-determined, you don’t have to worry about losing any of your initial investment, but you’ll also miss out on the opportunity for the stock market’s higher returns. Either way, bonds are a great addition to your portfolio because they help you diversify away from risk. In case something drastic happens, such as a war, bonds won’t drop like stocks will, so you’ll still have a portion of your capital that is safe.
Picking Stocks
If you’re more interested in picking your own stocks, there are plenty of options available. You can download one of the many apps that are dedicated to investors. After depositing your money into the app’s account, you can buy and sell any stocks. There’s an important caveat if you’re interested in buying and selling stocks on your own. Day trading is when you open and close a position on the same market day. The federal government has specific rules that apply to day traders. If you make more than three day trades in five business days, you’ll need to maintain an account balance of at least $25,000. Day trading is a viable option for your investments, but you may want to learn more about the stock market before committing your capital.
Long-Term Investing
Day trading is one way to invest in your future, but it can be stressful. If you’re interested in increasing your nest egg, you may appreciate the “Invest it and forget it strategy.” Find a reputable company that you know isn’t going out of business and invest your capital there. You can forget about looking at the stock markets every day; you only need to look at your statement on an annual basis. This is the relaxing way to invest in your future. You won’t need to worry about getting stressed out and sell your stocks only to see them rise again as soon as you’ve completed your sale.
Mutual Funds
While picking stocks is one way to invest in the stock market, you may want to learn more about the benefits of mutual funds. These funds include several stocks so that your risk is reduced. Because you own multiple companies, the effect of each individual stock is minimized. In other words, one stock can drop in value, but this one drop won’t have an overly significant impact on your portfolio. On the other hand, if your entire portfolio is invested in a single company, you may lose your entire investment should the stock tank. Many people recommend mutual funds to beginning investors or those who have a limited understanding of the markets. You can invest in a particular sector, or you can pick a broader fund that tracks the Dow Jones or the NASDAQ. Either option has benefits, and you can choose multiple mutual funds for your portfolio.
Investments are the smart way to make your money work for you. While interest rates are higher than they’ve ever been, you’ll still make more money by investing in stocks than you’ll make from leaving your money in the bank. The most you’ll get from a CD or savings account is 8%. Invest in stocks or a mutual fund, and you may see returns that are more than 20%.
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