Everybody always talks about needing to save money. This year, you should switch your focus to investing it instead.
Investing carries some risk. Even so, it also provides the opportunity for financial growth and stability in the future.
Navigating through the investment options can quickly overwhelm a person. So, let’s break down the 5 best income investments to make this year!
Stocks With Growth Potential
Putting your money into the market carries high risks. But the right investment can secure your financial future, as Warren Buffet will tell you.
When a company stock does not necessarily yield a high income but increases in capital value, economists refer to it as a growth stock. These stocks come from companies that carry the potential to increase revenue and earnings at a faster rate than their competition due to the large, sustainable positive cash flow they generate.
Look at Paypal (PYPL) for instance. This company continues its 15-year growth streak as it spreads across the country and around the world, making investors expect to see its value climb throughout 2020 and 2021.
Yext Inc. (YEXT) offers another potential for growth at a much lower buy-in for new investors. This cloud-based branding company offers the functionality of the future to businesses, making it one of the best investments right now.
Stocks That Pay Dividends
Some companies distribute their revenue back to investors quarterly. This payment made to their shareholders is called a dividend.
Your shares innately offer your long term earning potential. Investing in stocks with dividends also give you the luxury of short-term profit as well. The 3 highest paying dividend stocks currently are Macerich (NYSE: MAC) at 9%, CenturyLink(NYSE: CTL) at 8.6%, and Iron Mountain(NYSE: IRM) at 7.9%.
Sustainable ETFs (Environmental, social and governance (ESG)) are currently quite popular with investors, as many people want to put their hard earned cash into companies that are doing business ethically. Some to consider would be ETFs like CRBN, SPYX, and BGRN.
Certificates of Deposit (CDs)
For slow and steady earnings and little risk, invest in a CD. At regular intervals, your investment will grow.
Interest rates may vary and will affect growth. Rather than risking losing your money, you simply risk little growth when the economy struggles or losing interest if you pull out early.
When your investment matures, you receive the principal plus interest. It’s like an amped-up savings account!
Low-risk investors can capitalize on government bond funds. For 2020, these should gain moderate interest.
But, in today’s economy, many investors are chancing big default risks with high-yield investments to drive up their profit margin. Low fees trump low risk with this type of bond at the moment, because of the economy creating lower yields. Fidelity Capital & Income Fund (FAGIX) requires no minimum investment and shows a high average annual 10 year returns.
You see this investment growing in popularity, as the investor takes on less risk than when buying market shares and puts in less research of individual companies.
You do not need to know every spec about your favorite paystub creator and all of their competitors. Instead, you need to understand how both outside and inside factors will affect each industry.
Research the Best Income Investments Before You Buy
You need to research everything going on in the world to decide how it may affect the future of your investment. Last year’s best income investments can fall to the bottom based on advancements, wars, and even social influencers.