Updated: Nov 29
Author: Marie Gerland
Date of Publication: 08/05/2023
Investing money seriously is a means to grow your financial wealth. However, there are many investment opportunities. Thus, it can be hard to choose between these different investment options and it is also possible to make investment mistakes. This is why it is good to consider smart investments options. Indeed, it is important to be aware of all the characteristics of an investment to reach your financial goals. So, in this article, we are going to focus on 5 smart investments to explore.
1. High yield savings accounts: low risk and high return
High-yield savings accounts are perfect for investors who are risk-averse but want higher returns than those of standard savings accounts. Indeed, the investor earns an interest rate on their deposits. This interest rate fluctuates but is mostly higher than standard interest rates.
Moreover, high-yield savings accounts are a smart investment because it is easy to have access to these savings. Thus, it gives flexibility to depositors. Therefore, high-yield savings accounts are a good investment decision for investors who want to earn more on their savings without taking on too much risk.
2. Certificates of Deposits: low-risk investment
Certificates of Deposits (CDs) are also a sort of savings account. In particular, the investor deposits a fixed amount of money for a fixed period of time. And this investor receives an interest rate, being higher than in standard savings accounts.
Moreover, Certificates of Deposits are insured by the FDIC: the Federal Deposit Insurance Corporation. The FDIC insures up to $250,000 per investor. Thus, this insurance enables CDs to be considered as low-risk investments. Therefore, Certificates of Deposits are smart investments, with a low risk and a securitized return for investors.
3. Cryptocurrencies: the new investment opportunities
Cryptocurrencies have been more and more popular for several years. For example, Bitcoin or Ethereum have gained popularity. What’s more, cryptocurrencies are considered a smart investment because they can enable really high returns.
However, cryptocurrencies are volatile. And this volatility or unpredictability leads to more risks. Therefore, investors choosing to invest in cryptocurrencies must not be risk averse and be careful when making investment decisions.
4. Real Estate: a securitized investment
Real Estate investment is widely known and considered by investors. Investing in real estate is seen as a source of steady income and a source of possible capital gain. Indeed, a real estate investor will receive a rental income each month. Moreover, the real estate property can also gain value over time and the investor can gain money by selling the property.
Another great advantage of real estate investment is that it enables you to use your debt capacity. In fact, this helps investors reach their goals faster and to get access to bigger investments without being in a fragile financial situation.
Therefore, real estate is a smart investment to consider. However, there are some risks, such as market fluctuations or unpredictable expenses.
5. Dividend stocks: steady income
Dividend stocks are issued by companies that pay out a portion of their profits to shareholders in the form of dividends. These dividends represent a steady stream of income for investors. Apart from that, they can increase over time if the company is financially stable and growing.
However, dividend stocks carry some risks because the stock price can be volatile. This is why it is preferable to make research on the stock and the financial health of the company, before investing.
Thus, dividend stocks are a good investment for investors looking for a steady income and for potential growth.
To conclude, there are many smart investments that should be considered by investors willing to achieve some financial goals. Here we have focused on 5 smart investments, but there are some other interesting ones too. So, the best investment strategy will depend on the investors’ goals, risk aversion or investment horizon. That’s why investments should be adapted to the investors’ situation.