When it comes to investing, the stock market is generally the most well-known option. You likely see it reported on the news every day, and you’re especially familiar with it if you read any financial journals. It can be a great option for new arrivals to the investing world, but it will require some research, and beginners will want to look into basic stock investment tips. One can use several techniques to invest in the stock market, but new investors are generally advised to build their investments over time by letting them accumulate. While day trading (buying and selling positions within the same day) is popular, it isn’t straightforward and best left to experienced investors.
Perhaps you don’t want to invest in stocks. Maybe you want more diversity in your portfolio, or maybe another asset class feels more your speed. Fortunately, there are many great investment options outside of the stock market. Here are just a few great investment strategies for new arrivals and experienced investors alike.
Mutual Funds
A mutual fund is essentially where multiple investors pool their money into various securities options. These securities may be stocks, but they can be other forms of investments too, such as bonds, certificates of deposit, Treasury bills, and more. These funds are generally managed by an investment manager who seeks to keep the funds on track with the goals laid out by the investors in the beginning. There will often be a minimum investment requirement.
The greatest advantage of mutual funds is that they give investors access to a diversified portfolio at all levels, and they only have to pay a low expense ratio management fee once per year. If you have a retirement plan sponsored by your employer, the money likely goes into mutual funds. There are several forms of mutual funds requiring varying amounts of research and maybe set up to earn a specified income, sell based on certain market indicators, or play the money market.
Real Estate
This can be a great investment opportunity for investors of varying experience and skill levels. Land and commercial buildings are both forms of real estate investment. While this category may seem intimidating, there are ways for most investors to get involved and diversify their portfolios.
One of the best ways to get into real estate is with a real estate investment trust, also known as a REIT. A REIT is basically a company that owns and operates real estate, frequently commercial and retail buildings such as apartments, malls, and other stores. While you can do your own due diligence to try and purchase properties on your own, a REIT allows you to check out the market without assuming all the risk yourself. Either way, you’ll probably want to put on your favorite travelers pants and check out any properties you’re interested in yourself.
Of course, it doesn’t hurt that REITs are known for paying high dividends to their investors. Interest rates on the property are currently low, and a REIT is required to pay 90% of its taxable income to shareholders. The gains will be taxed higher than stock gains, however.
Alternative Investments
These are investment opportunities outside of the traditional market options. They’re considered advanced options and should probably only be seriously considered by an accredited investor. Alternative assets can include fine art, collectible items, and private debt investments, to name a few. Investors interested in these options will generally need an investment platform like Yieldstreet.
Yieldstreet helps an accredited investor find alternative assets and investment opportunities backed by collateral. If you’re wary of such platforms, go ahead and Google “is Yieldstreet legit?” You’ll find plenty of positive reviews from Yieldstreet investors. They require a minimum investment, but they’re a great opportunity for experienced investors looking to build their portfolios even more.
These are just a few great options for you as you get more comfortable with investing. You also have options like 401(k) plans, exchange-traded funds, and opportunities on investment apps.