At the dawn of the New Year, it is a good idea to take some time off to review your investment portfolio and make necessary changes. This is because the winning assets keep changing from year to year. Here are some of the best investment funds options for 2018:
#1: Stock market
Historically, stock market investments have paid off. Many people who do not have faith in the financial markets choose to wait. Some people might tell you that the stock markets are overvalued right and it is not wise to jump in at this point. All these arguments would turn out to be right if you put all your money in equities. You should invest only small amounts of money over a period of time by making use of a method known as “dollar cost averaging.” This means that you buy less when the stock market remains high and more when it is weak.
#2: Online forex trading
Online forex trading has been a topic of debate for a long time now. This is because many investors fail to have the level of success they had imagined. This has cast a doubt on the viability of online forex trading as an investment option. However, the daily trade volume has topped the $5 trillion mark and retail forex trading is gaining a great deal of popularity. Like all other types of investments, online forex trading also has its own risks. Developing a clear understanding of the forex market and investing wisely by following proven strategies helps you to mitigate the risks.
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#3: Cryptocurrency trading/investment
Initially, cryptocurrencies were considered as a niche investment opportunity. However, in 2017, the digital currency market broke many records. Digital assets now represent a mainstream opportunity and are poised for further expansion in 2018. In the beginning of 2017, the cryptocurrency market capitalization was around $18 billion. Today, it is at an astonishing level of $370 billion. During the same period, the stock market gained just about 17 percent to 18 percent. The difference is massive and this has made investing in cryptocurrencies more appealing. The reason behind the surge in demand for digital currencies is the blockchain technology which prevents fraud and counterfeit.
Also Read : 3 Ways to Invest in Cryptocurrencies
#4: Real estate
Real estate does offer a great investment opportunity in 2018. Now, restrain yourself from running out and buying a physical property. You cannot become a landlord overnight and it involves a great deal of stress. Fortunately, there are other ways of investing in real estate. One option is real estate notes. It is attractive because you don’t have to deal with any tenants. Another option is investing in companies like Fundrise that buy commercial properties. They allow you to make small investments starting from around $1,000. Such investments also carry some amount of risk. So, research properly before investing in such platforms.
The year-to-date ROI on Gold has been 2.9 percent. Until September last year, it was 7.0 percent. However, interest rate expectations in the US and optimism related to tax reforms resulted in a price correction. You can allocate 8 to 12 percent of your money for investment in gold. This is because liquidity will be affected because of Fed’s decision to wind down its balance sheet and the ECB s plan to cut down bond purchases. When liquidity is affected, stock markets will come under pressure and gold would do better.
#6: Certificates of Deposits (CDs)
CD rates have gone up after the Federal Reserve’s move to raise interest rates. Further boosts are in the offing this year. Though the investments might climb only gradually, they could expect some handsome returns over the year. However, you need to choose your certificates and time your investments properly. Further, you should follow the best practices of investing in CDs so that you are in a better position to better returns irrespective of whether rates rise quickly or slowly.
Bonds provide balance to your portfolio and help you to manage stock market volatility. The Fed has hinted it could hike interest rates several times in 2018. If it happens, then the bonds that have been purchased earlier on may not be very attractive in the future. This means that you would be better off if you buy new bonds instead of maintaining the low rated bonds.
Still, bonds should be a part of your investment portfolio, according to investment expert. This is because they provide stability to your portfolio and income. Moreover, they carry less risk.
#8: Peer to Peer Lending
Peer-to-peer lending platforms such as the Lending Club allow you to loan small amounts of money to individuals and earn a decent return of 6 percent or more. As a peer-to-peer lending investor, you are helping other people reach their goals. The good thing about this is that you are not giving large amounts of money to people who you do not know at all. According to experts, the benefits of investing in peer-to-peer lending platforms include the following:
• Easy to sign up and started
• Five to Seven percent returns
• Starting investment can be as small as $1,000
In 2017, people invested as much as $150 billion on international stocks through ETFs, which was much higher than $16 billion invested in the previous year. The MSCI Emerging Markets, Developed Markets, and All Country World Index performed much better than the Dow and the S&P 500. Therefore, the best way of riding global growth at a low cost and risk is through ETFs that are broad-based. Further, they are more tax efficient compared to mutual funds because of low turnover and create fewer taxable events such as triggering capital gains.
#10: Own business
Owning a business enables you to create and follow your own schedules instead of working for someone else. However, you have to be fully accountable for all your decisions. The start-up process may be tough and you may have to put in long hours of work and have only a little money to spend on you. However, if you do it well, the rewards will definitely be huge in 2018. If you do not want to give up your current regular income, it is a good idea to consider building up a career, for example, in online forex trading. Go for your own business, it is worth the effort.