The earlier you begin to invest your money, the more time it will have to grow and compound over time, giving you the ability to grow your wealth and save for retirement.
However, choosing the right investment is the most challenging part and will ultimately determine the returns you enjoy. For example, over the past 50 years, the average return of the S&P 500 is around 10%, whereas leaving your money in high yield savings account for that same period has only yielded about 1% annually.
If you’re looking to grow your wealth, keep reading this guide and discover the top investment choices you need to understand to make smart investing decisions.
High Growth Tech Stocks
Tech stocks are the “in-thing” right now next to cryptocurrencies as they have experienced a year where technology has become a critical factor in most people’s lives. The pandemic has given way for companies to utilize technology in ways they didn’t have a need for before. For example, Zoom meetings have become the norm for most companies holding virtual discussions, and Zoom’s stock has enjoyed a return of over 450% year-to-date.
Many investors have been preaching all year about how tech stocks are overvalued and are “looking like a bubble.” But that hasn’t slowed down the top performer’s momentum from breaking into all-time high prices. One of the reasons these tech stocks have experienced significant price appreciations can be attributed to sales and revenue growth.
One thing to look for when researching tech stocks is how it has performed relative to its peers. If a stock is consistently outperforming its peers, there’s a reason for that – don’t try to invest in other stocks because they seem cheaper.
Another asset class that has shined this year is precious metals, including gold and silver. The rare earth metals have made a comeback this year as currencies such as the US Dollar has faced pressure.
Precious metals tend to increase in value when the economy is under pressure like it is currently due to the pandemic. There are a few different ways investors can go about obtaining precious metals, including:
- Buying it physically
- Investing in stock
- Selecting an ETF
- Trading futures
Investors look at these assets as security when economic times are tough, as they have proven throughout history to hold value.
If you’re looking for safer, more stable investment ideas, buying and holding dividend stocks may be the right investment decision for you. These stocks will pay investors a share of their earnings, typically quarterly or annually, for investing in the company.
Dividends can add up significantly over time and help individuals compound their wealth. According to research from Hartford funds, 78% of the total returns on the S&P 500 are thanks to reinvested dividends and the compounding effect.
Additional Insights on the Top Investment Choices
You may have read somewhere, or maybe someone told you that you should start investing as soon as possible. This is a true statement, but you also have to decide what investment ideas make the most sense to increase in value over time. Ensure you’re doing your due diligence before tossing money into any asset to avoid any potential catastrophes.
If you’d like to learn more about the top investment choices, check out the rest of our website for additional investment resources!