Since 1896, for example, the stock market has risen about two-thirds of the time over the period beginning two days before Thanksgiving and lasting until the end of December’s first week.

That’s markedly better than the 54% odds of rising that prevail on all other comparable periods in the market, but it still means that stocks fall one out of three times over those pre- and post-Thanksgiving sessions.

So why did we state those figures? Well improving the way you invest should be your priority all round the year even before and after Thanksgiving.

How can you achieve that? That is what this article is aimed to help you figure out. Let’s get into it.

• How do I Maximize my Investment Return?
• What should you Invest in before a Recession?
• What is the best Investment for the next 5 years?
• What is the best Investment option for Beginners?
• What is Safest Investment with Highest Return?

How do I Maximize my Investment Return?

To create a large investment portfolio, you need to save money regularly, invest consistently, and learn to stay the course for as many years as it takes.

Read Also: Investing in Cryptocurrency: Is it Worth the Risk?

There are, however, several strategies that can help you improve your investment gains over time. This section will highlight a few of those strategies.

1. Look for Less Expensive Ways to Invest

It’s easy to ignore investment expenses during bull markets – especially if you’re making money. However, the impact of those expenses can really add up over time, and not in a good way.

In fact, lowering your expenses just 1% can make a huge difference in the performance of your investment portfolio over the long-term.

Let’s say that you’re earning an average of 10% per year on your portfolio, but paying 2% in investment fees of all types. That will leave you with a net rate of return of 8%. If your portfolio is $100,000, it will grow to $466,097 after 20 years.

If you can cut your annual investment expense in half – to just 1%, your effective net return will rise to 9%. If your portfolio is $100,000, after 20 years it will grow to $560,440. That’s a difference of roughly $94,000, and it is earned simply by cutting your investment expenses by 1%.

To find the lowest fees possible, look for an online broker that has either a low- or no-annual fee, and lower transaction costs. Favor funds over individual securities (since you won’t trade them as frequently), and choose no-load funds wherever possible.

2. Focus on Diversifying your Portfolio

Most of us know about the importance of diversification. But, just as is the case with investment expenses, the concept can easily get lost during a bull market.

After all, if your stock allocation becomes disproportionately large in a rising market, it will actually help your portfolio performance – at least for as long as the bull market lasts.

But that’s the problem – bull markets never last. The August mini-crash should be a wake-up call to anyone who has been ignoring proper diversification over the past few years.

Markets fall much more quickly than they rise, which means that advance preparation is completely necessary. And that is what diversification is all about – preparing for changing circumstances.

No matter how well your stock allocation is doing, be sure to maintain appropriate percentages of your portfolio in both fixed income investments and cash equivalents.

They will help to reduce the losses you’ll experience on your stock allocation in a down market. Remember, minimizing losses during a bear market is just as important as maximizing your gains in a bull market.

3. Rebalance Regularly

Rebalancing is all about returning your portfolio to its original level of diversification. If you originally planned to have 60% of your portfolio invested in stocks, 30% in bonds, and 10% cash, it will be time to rebalance if your stock allocation has grown significantly higher than 60%.

The same is true in a bear market. If your stock allocation has fallen to 40% due to the declining market, you should rebalance to increase that position. It will enable you to take advantage of gains when the market recovers.

4. Take Advantage of Tax Efficient Investing

Like investment expenses, income taxes on your investment earnings have a substantial impact on the performance of your portfolio.

While it’s not usually possible to make them go away completely (unless of course you are investing in a tax sheltered plan, like an IRA), it’s very possible and absolutely necessary to minimize investment taxes wherever possible.

One of the best ways to do this is to avoid heavy trading. Trading generates capital gains, and capital gains result in capital gains taxes.

Those taxes – along with all of the trading fees involved – can result in a portfolio that doesn’t perform materially better than a buy-and-hold model that’s invested primarily in funds.

And speaking of funds, you should favor index-based exchange traded funds (ETFs). Since such funds are tied to the underlying index, they only trade stocks when the index changes.

That means that they trade stocks far less than actively managed mutual funds. That minimizes your capital gains, which ultimately minimizes capital gains taxes.

5. Tune-Out the “Experts”

Have you ever heard an expert confidently predict that the Dow is going to 25,000 – or crashing down to 5,000? Ignore them. “Experts” who make claims like that are nothing but crystal ball gazers. They have no more insight as to where the market is heading than you or anyone else, but they sure think they do.

But, that doesn’t mean that they’re harmless. Since they deal primarily in hyperbole, they can get your attention easily. After all, no one ever wants to get caught napping while big things are happening.

And if a self-styled expert can cast himself as credible, you may just decide that he’s someone who knows what’s really going on.

If you want to be a successful investor, particularly on a long-term basis, you’ll have to learn how to tune out this kind of chatter. All it does is distract you from your own investment goals and strategies, and that won’t help you in the long run.

6. Continue Investing in Your Portfolio No Matter What the Market is Doing

A portfolio that is growing through a combination of investment gains and regular contributions can grow dramatically. You should never allow the direction of the market to affect your contributions – but sometimes that’s exactly what happens.

Both bull markets and bear markets can cause you to be hesitant to continue contributing to your portfolio:

• During bull markets, strong investment returns can easily convince you that continued contributions are no longer necessary.
• During bear markets, you may become convinced that contributing to your investment portfolio is an exercise in throwing good money after bad.

Both assumptions are completely counter-productive. Contributing to your portfolio during a bull market will not only cause your portfolio to grow faster, but it will also provide you with fresh capital for more investments.

Continuing to contribute to your portfolio during a bear market is even more important. If your portfolio is falling in value due to negative returns, your contributions will be the only factor that minimizes the decline.

Even more important, the new cash that you put into your portfolio will represent capital to buy stocks at deep discounts when the market is at bottom, and finally begins to move in an upward direction.

7. Think Long-term

Probably the worst delusion that can affect any investor is the “get rich quick” mentality. It’s especially hard to resist during bull markets. Everywhere you look, there are experts promising that you can double or triple your money in just one or two years by following their plan. It’s utter nonsense!

Like paying off a mortgage, building a career, or raising a child, successful investing requires both time and patience. You should never measure your time horizon in months, or even years – but rather in decades. 

By investing $10,000 per year in an index fund with an average rate of return of 8% over 30 years you will accumulate nearly $1.25 million. That may not be get-rich-quick, but it is a way to get rich – and that’s what really counts

What should you Invest in before a Recession?

A properly constructed portfolio, including a mix of both stock and bonds funds, provides an opportunity to participate in stock market growth and cushions your portfolio when the stock market is in decline.

Such a portfolio can be constructed by purchasing individual funds in proportions that match your desired asset allocation. Alternatively, you can do the entire job with a single fund by purchasing a mutual fund with “growth and income” or “balanced” in its name.

1. Federal Bond Funds

Several types of bond funds are particularly popular with risk-averse investors.² Funds made up of U.S. Treasury bonds lead the pack, as they are considered to be one of the safest.

Investors face no credit risk because the government’s ability to levy taxes and print money eliminates the risk of default and provides principal protection.

Bond funds investing in mortgages securitized by the Government National Mortgage Association (Ginnie Mae) are also backed by the full faith and credit of the U.S. government.

Most of the mortgages (typically, mortgages for first-time homebuyers and low-income borrowers) securitized as Ginnie Mae mortgage-backed securities (MBS) are those guaranteed by the Federal Housing Administration (FHA), Veterans Affairs or other federal housing agencies.

2. Municipal Bond Funds

Next, on the list are municipal bond funds. Issued by state and local governments, these investments leverage local taxing authority to provide a high degree of safety and security to investors.

They carry a greater risk than funds that invest in securities backed by the federal government but are still considered to be relatively safe.

3. Taxable Corporate Funds

Taxable bond funds issued by corporations are also a consideration. They offer higher yields than government-backed issues but carry significantly more risk.

Choosing a fund that invests in high-quality bond issues will help lower your risk. While corporate bond funds are riskier than funds that only hold government-issued bonds, they are still less risky than stock funds.

4. Money Market Funds

When it comes to avoiding recessions, bonds are certainly popular, but they aren’t the only game in town. Ultra-conservative investors and unsophisticated investors often stash their cash in money market funds. While these funds provide a high degree of safety, they should only be used for short-term investment.

5. Dividend Funds

Contrary to popular belief, seeking shelter during tough times doesn’t necessarily mean abandoning the stock market altogether.

While investors stereotypically think of the stock market as a vehicle for growth, share price appreciation isn’t the only game in town when it comes to making money in the stock market.

For example, mutual funds focused on dividends can provide strong returns with less volatility than funds that focus strictly on growth.

6. Utilities Mutual Funds

Utilities-based mutual funds and funds investing in consumer staples are less aggressive stock fund strategies that tend to focus on investing in companies paying predictable dividends.

7. Large-Cap Funds

Traditionally, funds investing in large-cap stocks tend to be less vulnerable than those in small-cap stocks, as larger companies are generally better positioned to endure tough times.

Shifting assets from funds investing in smaller, more aggressive companies to those that bet on blue chips provide a way to cushion your portfolio against market declines without fleeing the stock market altogether.

8. Hedge and Other Funds

For wealthier individuals, investing a portion of your portfolio in hedge funds is one idea. Hedge funds are designed to make money regardless of market conditions. Investing in a foul weather fund is another idea, as these funds are specifically designed to make money when the markets are in decline.⁸

In both cases, these funds should only represent a small percentage of your total holdings. In the case of hedge funds, hedging is the practice of attempting to reduce risk, but the actual goal of most hedge funds today is to maximize return on investment.

The name is mostly historical, as the first hedge funds tried to hedge against the downside risk of a bear market by shorting the market (mutual funds generally can’t enter into short positions as one of their primary goals).

Hedge funds typically use dozens of different strategies, so it isn’t accurate to say that hedge funds just hedge risk. 

In fact, because hedge fund managers make speculative investments, these funds can carry more risk than the overall market. In the case of foul weather funds, your portfolio may not fare well when times are good.

Regardless of where you put your money, if you have a long-term timeframe, look at a down market as an opportunity to buy. Instead of selling when the price is low, look at it as an opportunity to build your portfolio at a discount.

When retirement becomes a near-term possibility, make a permanent move in a conservative direction. Do it because you have enough money to meet your needs and want to remove some of the risks from your portfolio for good, not because you plan to jump back in when you think the markets will rise again

What is the best Investment for the next 5 years?

When you invest your money, you want to earn the highest return possible. But, investing is an inherently risky activity. If you absolutely need money within 5 years, prudence dictates that you should dial down the risk a bit with your investments.

But, how can you invest and still earn a return, even if you need the principal back within 5 years?

With that short of a time frame, your investment options are limited. But, there are still some good choices that can earn you more than just keeping your money in cash.

Here’s a look at some popular investment options, along with an analysis of where they lie on the risk-reward spectrum.

1. Stocks

For many investors, stocks are the first choice they think of when it comes to making an investment. After all, over the long run, stocks have provided a much better return than bonds, cash, gold or other popular investments.

The problem with stocks for those who have a short time frame is their volatility. True, the long-term returns for stocks are impressive. But, the short-term selloffs can be vicious.

In the 2008-2009 financial meltdown, for example, the stock market fell by more than 50 percent. If you were saving for a short-term goal, that kind of loss could be devastating.

Stocks may be a great investment for the long-term, but if your investment horizon is 5 years or less, you’d probably be better served looking elsewhere.

The risk of capital loss over the short-term is just too great. Even a diversified portfolio of index funds and ETFs can prove to be risky if the underlying securities are held mostly in stocks.

2. CDs

Certificates of deposit are a good option for short-term savings.

CDs offer higher rates of interest than most checking or savings accounts. You can usually select from a broad range of maturity dates, from as little as one month to as long as 20 years in some cases.

CDs also carry FDIC insurance, up to $250,000 per account. Investment minimums usually start at $1,000. Many CD accounts, such as those offered by online banks, have no minimum investment.

3. Series I Savings Bonds

Series I savings bonds are another low-risk savings investment offered by the U.S. government. The main benefit of Series I bonds is that they carry no inflation risk.

The interest you earn on a Series I bond is a combination of a fixed rate and a semi-annual inflation rate. When inflation goes up, so too does the interest you earn on the bond.

You can buy Series I bonds electronically for as little as $25. Bonds are issued in terms ranging from 1 year to 30 years.

The one drawback for shorter-term investors is that you must forfeit the previous 3 months of interest if you redeem the bond before 5 years. If you have a 5-year window for investment, however, a Series I bond is both secure and inflation-resistant.

4. Online Savings Account

Online savings accounts are viable options for short-term money.

Savings accounts, in general, don’t pay a lot. In fact, according to the Federal Reserve Board, the average savings account rate is just a few hundredths of one percent.

Online savings accounts, however, often pay much higher yields. You can expect to earn at least 20 times the “average” savings account rate by going with an online bank.

Reduced overhead is the main reason why these banks can pay higher levels of interest.

Best of all, savings accounts are readily accessible. A simple click on a website, or a phone call to your broker, and you can have your money transferred out to you immediately.

You’ll likely need as little as $1 to open an online savings account.

5. Corporate Bonds

Corporate bonds are a more advanced investment option for most people. They make regular interest payments and return principal to investors at maturity.

Corporate bonds come in a range of maturity dates, so you could consider investing in one that comes due in 5 years or less.

The main risk with corporate bonds is that the company becomes financially insolvent and can’t afford to pay interest or principal. You can minimize this risk by purchasing highly-rated bonds.

Most corporate bonds are rated by third-party, professional rating agencies, like Standard & Poor’s. These ratings reflect the likelihood of default.

The top of the rating scale is AAA, with ratings of AA, A and BBB still considered “investment grade.”

Most corporate bonds have a face value of $1,000. You must purchase bonds in whole units, so you’ll need about $1,000 to buy individual corporate bonds.

6. Treasury Bills

As another more advanced option, Treasury bills are among the safest investments available. Your interest and principal is backed by the “full faith and credit” of the U.S. government.

Treasury bills come in maturities of 4, 13, 26 and 52 weeks. So-called “cash management bills,” which are another form of Treasury bills, are issued in terms of just a few days.

Bills are sold at a discount and grow in value until they mature at $1,000 each. Thus, you can expect to pay slightly less than $1,000 to buy a single Treasury bill.

You can also invest directly through Treasury.gov in increments of just $100. The interest rate on Treasury bills is determined by auction.

Treasury bill rates are typically fairly low, due to their safety level. However, rates are usually higher than the average checking or savings account.

What is the best Investment option for Beginners?

Investing for beginners can be confusing, but these investments make it easy. Investing is easy. Figuring out where to invest is the hard part, especially for beginner investors who likely have better ways to spend their time than researching investments.

If studying charts and ratios isn’t your thing, you can still be successful. The key is to start early, headed in the right direction. “If you’re moving fast but you’re going down the wrong road, it’s not helping you,” says Susan Mitcheltree, principal at Berman McAleer.

“To quote Jim Rohn, you can’t change your destination overnight but you can change your direction.” These nine investments for beginners will get you headed in the right direction for $1,000 or less.

1. Index funds

First things first: “Forget about trying to ‘beat the market,’” says Stephen Caplan, a financial advisor at Neponset Valley Financial Partners. Many beginning investors learn the hard way that simple investment strategies are often better – not to mention easier.

Save yourself time, energy and unnecessary grief by opting for a straightforward strategy from the start, Caplan says. He points to low-cost index funds tracking the total U.S. and total international stock markets.

“Through just these two vehicles, you’d be invested in about 10,000 companies across the world and would be paying under 0.1% in fees. To reduce risk, add a low-cost bond index fund to the mix.”

2. Target-date funds

For an even more simplified strategy of investing for beginners, consider target-date funds. These retirement-planning tools are designed to be one-stop shops for retirement savers. “You have a solid, diversified portfolio within one fund that will slowly get more conservative as you get closer to retirement,” says Daniel Patterson, a CFP and founder of Sweetgrass Financial Planning.

“You don’t have to worry about any of the technical details, such as what the proper portfolio allocation should be or when to rebalance.” Many large investment firms offer target-date funds. Just look for the fund corresponding to your retirement year and call it a day, or a retirement plan.

3. Balanced funds

If you don’t like the idea of your fund changing its allocation over time, target-risk or asset allocation funds are another good investment option for beginners. These funds maintain a set allocation of stocks to bonds indefinitely.

Danielle L. Schultz, principal financial planner at Haven Financial Solutions in Evanston, Illinois, suggests anxious beginning investors use more moderate balanced funds like the Vanguard Wellington Fund, Fidelity Puritan or Vanguard Balanced Index.

“They’re a bit more conservative than target-date funds for millennials and more aggressive than target funds for older ages, but don’t gyrate as much while still earning solid returns,” she says.

4. Exchange-traded funds (ETFs)

Funds are good investments for beginners because you get diversification at every level of investment, whether you invest $10 or $10,000. Some mutual funds add a road block, however, with minimum investments.

This is where ETFs shine: Unlike mutual funds, the only minimum on an ETF is the share price, which is often far lower. “ETFs are one of the easiest ways to achieve diversification, largely due to how easy they are to purchase,” says Kip Meadows, founder and CEO of Nottingham in Rocky Mount, North Carolina.

They’re built like a mutual fund but trade like a stock. There are ETFs for every sector and even passive index fund ETFs.

5. No-transaction fee funds

As a beginning investor, cost is “tremendously important,” says Guy M. Penn, principal at St. Louis Private Advisors. “If every week you were to invest $100 and purchase a security with a $7 trading fee, you’re immediately down 7% on your investment.”

To avoid fee drag, look for “no transaction fee” funds. Most of the larger investment firms will have a list of ETFs and mutual funds you can purchase for no trading commission.

6. 401(k)s or 403(b)s

While what you invest in is important, it would be negligent to talk about smart investments for beginners without mentioning the importance of where you invest. Because before you buy an investment, you need a place to keep it.

One of the best places to start investing your first $1,000 is your employer-sponsored retirement plan. “401(k)s and 403(b)s often offer participants employer matching funds,” Mitcheltree says, “which can boost contribution amounts for young investors who often have a lot of other demands on their paychecks.”

And most plans offer some of the investment options for beginners discussed in this article.

7. Roth IRAs

Another smart investment for beginners is a Roth IRA, especially if you don’t have access to an employer-sponsored plan. You can invest in almost anything in a Roth IRA (including ETFs and mutual funds) and it’ll grow tax-free.

Just be aware that while Roth IRAs have many benefits, they do come with “some notable caveats, the biggest one being limited pre-retirement access to the money,” Mitcheltree says.

Likewise, you don’t get a tax deduction today for the money you invest in a Roth. But since you won’t have to pay taxes on it when you withdraw in retirement, Roth IRAs can be great places to house your first investments.

8. Robo advisors

For an investment house that comes with its own furniture, robo advisors make a great way of investing for beginners. These digital investment platforms use computers to curate and manage an investment portfolio for you.

They often begin by asking you questions about your financial goals and risk tolerance, then suggest a portfolio that suits your needs. Most have very low – or even no – minimums, and charge lower fees than human financial advisors.

If you find a robo advisor that offers automatic investments from your bank each month, you’ve got yourself set up for streamlined, long-term investment success.

9. A financial advisor

Sometimes the best investment for beginners is in an expert who can help you get on track and stay on it.

A good financial advisor “will explain things simply, be clear about how they are compensated and have a plan to help you as the stock market and economy go topsy-turvy,” says Todd Murphy, a facilitator at Yale School of Management and financial advisor at Prime Financial Services in Wilton, Connecticut.

Investing your first $1,000 is just the beginning. It can pay to have someone to guide you through investing your next $1,000 and beyond.

What is Safest Investment with Highest Return?

Building an investment portfolio that has at least some less-risky assets can be useful in helping you ride out the volatility in the market, and there’s been no shortage of that this year.

The trade-off, of course, is that in lowering risk exposure, investors are likely to see lower returns over the long run. That may be fine if your goal is to preserve capital and maintain a steady flow of interest income. But if you’re looking for growth, also consider investing strategies that match your long-term goals.

1. High-yield savings accounts

While not technically an investment, savings accounts offer a modest return on your money.

There are a number of accounts available with a 0.65 percent yield. And you can get a bit more than that if you’re willing to check out the rate tables and shop around.

Why invest: A savings account is completely safe in the sense that you’ll never lose money. Most accounts are government-insured up to certain limits, so you’ll be compensated even if the financial institution fails.

Risk: Cash doesn’t lose dollar value, though inflation can erode its purchasing power.

2. Savings bonds

Like savings accounts, U.S. savings bonds aren’t investments, strictly speaking.

Rather, they’re “savings instruments,” says Mckayla Braden, former senior adviser for the U.S. Department of the Treasury, which operates TreasuryDirect.gov.

Via TreasuryDirect, the Treasury sells two types of savings bonds: the EE bond and I bond.

“The I bond is a good choice for protection against inflation because you get a fixed rate and an inflation rate added to that every six months,” Braden says, referring to an inflation premium that’s revised twice a year.

Why invest: The Series EE savings bonds pay interest up to 30 years, and they earn a fixed rate of return if they were issued in May 2005 or after. If a U.S. savings bond is redeemed before five years, a penalty of the last three months’ interest is charged.

Risk: U.S. savings bonds come with little to no risk, and they may also come with little or no return.

3. Certificates of deposit

Bank CDs are always loss-proof in an FDIC-backed account, unless you take the money out early.

Why invest: With a CD, the bank promises to pay you a set rate of interest over a specified term if you leave the CD intact until the term ends.

Some savings accounts pay higher rates of interest than some CDs, but those so-called high-yield accounts may require a large deposit.

Risk: If you remove funds from a CD early, you’ll usually lose some of the interest you earned. Some banks also hit you with a loss of principal as well, so it’s important to read the rules and check rates before you open a CD.

4. Money market funds

Money market funds are pools of CDs, short-term bonds and other low-risk investments grouped together to create diversification without much risk, and are typically sold by brokerage firms and mutual fund companies.

Why invest: Unlike a CD, a money market fund is liquid, which means you typically can take out your funds at any time without being penalized.

Risk: Money market funds usually are pretty safe, says Ben Wacek, founder and financial planner of Wacek Financial Planning in Minneapolis.

“The bank tells you what rate you’ll get, and its goal is that the value per share won’t be less than $1,” he says.

5. Treasury bills, notes, bonds and TIPS

The U.S. Treasury also issues Treasury bills, Treasury notes, Treasury bonds and Treasury inflation-protected securities, or TIPS:

• Treasury bills mature in one year or sooner.
• Treasury notes stretch out up to 10 years.
• Treasury bonds mature after up to 30 years.
• TIPS are securities whose principal value goes up or down depending on whether inflation moves up or down.

Why invest: All of these are marketable securities that can be bought and sold either directly or through mutual funds.

Risk: If you keep Treasurys until they mature, you generally won’t lose any money, unless you buy a negative-yielding bond. If you sell them sooner than maturity, you could lose some of your principal, since the value will fluctuate as interest rates rise and fall.

However, recent volatility in the market and the Fed’s move to lower interest rates to zero mean that some Treasurys may actually have a negative yield. So buying some of these bonds could actually cost you money.

6. Corporate bonds

Companies also issue bonds, which can come in relatively low-risk varieties (issued by large profitable companies) down to very risky ones. The lowest of the low are known as “junk bonds.”

“There are high-yield corporate bonds that are low rate, low quality,” says Cheryl Krueger, founder of Growing Fortunes Financial Partners in Schaumburg, Illinois. “I consider those more risky because you have not just the interest rate risk, but the default risk as well.”

• Interest-rate risk: The market value of a bond can fluctuate as interest rates change.
• Default risk: The company could fail to make good on its promise to make the interest and principal payments.

Why invest: To mitigate interest-rate risk, investors can select bonds that mature in the next few years. Longer-term bonds are more sensitive to changes in interest rates. To lower default risk, investors can select high-quality bonds from reputable large companies, or buy funds that invest in these bonds.

Risk: Bonds are generally thought to be lower risk than stocks, though neither asset is risk-free.

“Bondholders are higher in the pecking order than stockholders, so if the company goes bankrupt, bondholders get their money back before stockholders,” Wacek says.

7. Dividend-paying stocks

Stocks aren’t as safe as cash, savings accounts or government debt, but they’re generally less risky than high-fliers like venture capital, options, futures or precious metals.

Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it. So dividend stocks will fluctuate with the market but may not fall as far.

Why invest: Stocks that pay dividends are generally perceived as less risky than those that don’t, and they pay out cash.

“I wouldn’t say a dividend-paying stock is a low-risk investment because there were dividend-paying stocks that lost 20 percent or 30 percent in 2008. But in general, it’s lower risk than a growth stock,” Wacek says.

That’s because dividend-paying companies tend to be more stable and mature, and they offer the dividend, as well as the possibility of stock-price appreciation.

Read Also: Top 10 Ways to Start Investing Without Knowing Anything

“You’re not depending on only the value of that stock, which can fluctuate, but you’re getting paid a regular income from that stock, too,” Wacek says.

Risk:  One risk for dividend stocks is if the company runs into tough times and declares a loss, forcing it to trim or eliminate its dividend entirely, which will hurt the stock price.

8. Preferred stock

Preferred stock is more like a lower-grade bond than it is a stock. Still, it may fluctuate substantially if the market falls.

Why invest: Like a bond, preferred stock makes a regular cash payout. But, unusually, preferred stock may be able to suspend this dividend in some circumstances, though often it has to make up any missed payments.

Risk: Preferred stock is like a riskier version of a bond, but is generally safer than a stock. That’s because holders of preferred stock get paid out after bondholders but before stockholders. Preferred stocks typically trade on a stock exchange like other stocks and need to be analyzed carefully before purchasing.

Summary

With a lot of investment options provided in this article, you have no reason to shy away from investing. Also, if you already have some investment, you can already see how to improve it.

Whether as a beginner or an expert investor, you have different investment opportunities to start with as soon as possible. So get to and research on the best investment option that matches your financial lifestyle.