52% of Americans own stock, and 63% own some form of real estate. That means that the majority of the country has some kind of investment portfolio. As those numbers continue to grow, you’re probably left wondering what you should be investing in.
What types of investments are good in 2021? Should beginners be learning about real estate, stocks, bonds, or gold? Some of these have been in the news recently due to remarkable jumps in value, while others are tried and true favorites.
They each have their own merits. The stock market is the source of the highest returns historically, gold hit an all-time high in 2020, and bonds are considered one of the safest investments. Unlike commercial real estate investing, residential investment properties are considered a safe favorite because the market always bounces back after a crisis.
Choosing what investment option is right for you can be difficult, so let’s get the story on why each one has the potential to pay off in 2021.
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The stock market has been for a ride in the past year, but it continues to come back each time. There have been changes recently in which stocks are popular, and it has led to an interesting time for new investors. Some people who have never invested before are seeing huge returns on Gamestop and other niche stock.
This had an interesting impact on the stock market, mainly that traditionally well-performing stocks saw a sudden drop. Simultaneously, practically unheard of stock soared to the top of the board.
This interesting development makes now a good time to get in the game if you’ve been waiting for an opening. You can never be sure which stock will take off next, so keep your eyes and ears open.
A bond is a loan taken out by a company. Instead of going to a bank to request a loan, companies get their money from investors who buy their bonds.
Bonds come in secured and unsecured forms. A secured bond will be paid using the assets of a company if they can’t repay their obligations, while an unsecured bond returns little or none of your investment if the company fails.
A secured bond is considered a “safer” investment for beginners, given that it’s generally backed by the promise of some return. In general, bonds only provide a large return on investment if you keep them for a long time, or invest a lot of money initially. This makes these a better option for those considering long-term investments.
Investing in property has long been a favorite of both short and long-term investors. You have the option to choose how involved you want to be when you decide to bet on property.
You can simply give some money to an investment group to share between their holdings, or buy your own house or apartment complex to rent out. The choice is up to you, and the return on investment has the potential to be high. If you choose to buy a property to rent out, you will need to hire a property management firm to handle it. You can even own a property far away from where you live. The management company will keep things in check including understanding and following the local laws and customs.
By waiting until the market hits a lull to do your buying, you can snatch up a property at an excellent price and hold on to it until the market hits the perfect resale state. This is considered one of the “safer” forms of long-term investing because there’s always the potential to get at least some of your money back. While you would ideally wait until the market is in a good place to sell, you can usually sell a property fairly quickly if you need to.
If this sounds like a good option for you, check out an investment property loan program to learn more about your options. You can get a loan to cover the price of your investment property and join the real estate game in no time with simple and dependable mortgage financing.
Gold hit its highest price point in 2020 when prices reached $2,067.15 per ounce. Presently, it’s sitting at about $1,787, which is still nothing to be disappointed about. The fact that these numbers were reached during the Covid-19 pandemic shows just how valuable gold really is as an investment.
When other options experience drops in value due to crisis, gold tends to go up. This is partially due to gold being of value in every country, and partially due to people feeling that it’s a “real” investment because it’s something they can see and hold physically.
Its tendency to gain value while other investments suffer makes this a great option for those looking for a tried and true way to invest.
The key to investing is knowing what’s paying off in the market right now. If you need a place to get started, consider one of these intelligent investing options.