Deciding where to invest your money is often tricky. Usually, you want to secure the best possible return without taking on so much risk that you might end up with significant losses. Fortunately, there are some investments that can work well. If you’re trying to figure out where to invest money to get good returns, here are some options to consider.
Is Any Investment Guaranteed to Offer Good Returns?
Whether an investment is guaranteed to offer good returns typically varies based on what your definition of “good” is since “good” is a subjective term. There are some options that provide some level of certainty regarding gains, such as high-yield savings accounts or certificates of deposit (CDs). Both come with guaranteed return rates, though they usually aren’t as high as you’d find with other strategies.
Outside of fixed options like those above, you won’t find many guarantees when it comes to returns. For example, stock values fluctuate, so it’s possible to gain or lose money when you invest in the market. However, the potential for growth exceeds what you may find with guaranteed options like CDs; it just comes with a greater risk of losses.
Where to Invest Money to Get Good Returns
If you’re new to investing and looking for solid returns, dividend exchange-traded funds (ETFs) are a solid starting point. With ETFs, there’s an automatic degree of diversification. Instead of being associated with a single company, ETFs bundle up a range of investments in a variety of stocks, so purchasing an ETF share essentially works like getting a small piece of every share it represents.
As with any investment, ETFs can grow in value. However, by choosing dividend ETFs, you also benefit from small payments (based on a portion of the company’s profits) that you can reinvest or use as income.
Index Mutual Funds
Index mutual funds are another option that offers diversification and the chance for solid returns but carries far less risk than purchasing specific company stocks. These funds typically follow the S&P 500 index, which represents the 500 largest US companies based on market capitalization. As a result, the value of index mutual funds lines up with the S&P 500, rising when those companies rise and falling when they experience downturns.
The benefit here is that the market generally goes up over time. As a result, this option can work well for long-term investors, as short-term losses are typically offset as the years pass.
Corporate Bond Funds
While government bonds are usually a safer bet, the returns you capture with them are typically lower since the risk is minimized. If you’re looking for stronger returns, corporate bond funds could be a better choice. They function similarly to government bonds but have higher return potential since there’s a bit more risk.
Do you have any other tips that can help someone figure out where to invest money to get good returns? Have you explored some of the options above and want to discuss your experience? Share your thoughts in the comments below.
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