Having $10K set aside is the perfect amount to build a diverse investment portfolio. This article covers the top ways to invest $10,000 right now.
Where To Invest $10,000 Right Now
Stocks are the ideal investment for any new or experienced trader. There are over 6,000 companies represented in the United States' two highest-profile exchanges, NASDAQ and the New York Stock Exchange (NYSE).
These exchanges have stringent prerequisites a business must meet before being listed, requiring accurate financial data and a certain level of stability. Add in several other exchanges around the globe alongside over-the-counter trading, and your options increase that much more.
Stocks across the market vary vastly by sector, market cap, and other factors, thus falling into different categories.
Let’s look at some of the most popular types amongst investors.
Growth stocks play the long game, often seeing gradual gains over months and years. Companies best suited for long-term growth have firm foundations and business plans to succeed in their prospective sectors.
When considering an investment, look for organizations with strong leadership, manageable debt, and increasing financial numbers.
Penny stocks represent shares valued under the $5 mark. While they are a budget-friendly investment option, penny stocks often experience a lot of volatility and considerable risk. Still, day traders with a keen eye for market swings can make money by buying low and selling high, often within the same business day.
Keep in mind that many penny stocks appear on less reputable markets where they may not be required to provide accurate financial or company information.
Some companies pay dividends to shareholders based on the number of shares an individual owns. Businesses are not required to pay dividends, but those that do typically post them every three months or once a year.
A handful of ventures hand out dividend checks every month. Dividends typically won't make you rich but can be a great way to make passive income while investing.
Exchange-traded funds, or ETFs, offer the opportunity to invest in several companies at one low price point. ETFs follow an underlying index, representing dozens or hundreds of assets from a particular sector.
An ETF allows traders to build a diverse portfolio without breaking the bank instantly. Some ETFs even contain blue-chip companies, often too expensive to purchase independently.
Companies can issue bonds when looking for additional capital. To put it briefly, a bond is a loan from an investor to a business that the borrower must repay over a specific amount of time.
Like traditional loans, bonds come with interest rates that companies pay at a set interval, typically monthly. Both buyer and seller will establish the details of the bond at the onset of the deal, but bonds never give the investor ownership rights.
Bond transactions are handled over the counter with the help of a broker and are generally lower-risk investments.
Like stocks, it's wise to research a business to ensure it doesn't default during the payback process.
Gold, Silver, and Precious Metals
It's possible to invest in companies that mine precious metals, but it's also possible to buy them directly.
You can pick up physical pieces of gold from a local seller or consider buying them online from a reputable dealer. Be sure to consider storage options and the purity of the commodity before investing.
Like stocks, gold and other precious metals can increase or decrease in value. In most cases, these commodities offer more in the long run than putting money into a savings account.
Cryptocurrency is a relatively new investment opportunity, affording the potential to purchase digital funds. Values of cryptocurrency rise and fall over time, so traders can either play the market or hold on for long-term growth.
Investors must use either a broker or crypto exchange to acquire and trade this type of currency. Some popular coins already cost thousands of dollars to obtain, while others are still in their infancy. In total, there are over 10,000 cryptocurrencies available on the market.
Like any other investment, it's essential to research those best to purchase.
Real-estate investment trusts, also known as REITs, are a budget-friendly way to get involved in the real estate market. These trusts invest in several real estate properties, and traders buy shares of the REIT.
REITs typically buy commercial properties like strip malls, large retail spaces, warehouses, hotels, assisted living centers, etc. Although you won't own any properties themselves, you can still benefit from rent checks and other fees. These investments stand out for their dividends, often paying some of the highest rates throughout the year.
Should I Invest or Save $10,000?
There are certainly merits to both investing and saving $10,000. At the very least, putting this money in a bank account accrues some interest over time, but the rates are often low.
Investing that $10,000 in the assets listed above can earn much more money in the long run. However, these investment opportunities do come with more risk.
The stock market and associated assets can experience a lot of volatility, resulting in losses instead of gains. Investors taking the time to research opportunities and study market trends can do exceptionally well.
Newer traders may find bonds, ETFs, or growth stocks as lower-risk ways to get investing off on the right foot.
Where to Invest $10k: Final Words
There are many ways to invest $10,000, but not all are wise choices. Savings accounts don't offer high enough interest rates to grow your money at a viable rate.
The stock market can be overwhelming for some, but some research and a tentative approach can lead to higher gains than anything the banking industry currently offers. $10,000 is a significant amount to invest with, offering the ability to diversify that money across different platforms.
Don't let the fear of the unknown and possibly some risk keep you from attaining your financial goals!
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Noah Zelvis is an American copywriter on a mission to help clarify the nuances of the financial world. He is on staff with The Stock Dork (https://www.thestockdork.com/), where you'll frequently see him making stock picks and evaluating services. When he's not working, you'll likely find him running or traveling.