Guest post by Leah Darvis of Debit Cards where you can browse the best prepaid debit cards to find the right card for you.
If you’re like most people who have owned stocks for at least the last few years, then you probably got hosed as the market fell (apparently the term “crash” does not apply, regardless of the similarly catastrophic outcome).
Many Americans pulled out of the race completely (some not by choice) as the stock market plummeted, and some never went back. However, with the market beginning to turn around, and looking to hold or even gain over the coming months, it may be time to consider jumping back in the game and making a fresh investment in your future. And here are a few ways to approach it:
1. Stocks. Yes, they can be scary, but if you limit your risks and follow some sound advice, you stand to come out ahead. Strategists are urging stock-holders to diversify their portfolios and limit stock ownership to no more than 60% of their investments (often, even less). This way, if the stock market does go south, you won’t be left with nothing but the shirt on your back. Your best bet? Look into stocks that deal with technology (a perennial favorite) or green energy (which is on the rise), and don’t be afraid to look at overseas interests (although you may want to avoid international oil for awhile…).
2. Bonds. Although they won’t earn as much (or as fast) as stocks, they are certainly the safer bet. But because the market isn’t entirely stable just yet, you may want to go with short-term bonds that will mature in a few years. This should show a decent return on investment and with the quick turnaround, you can capitalize on the market as it continues its upward trend (whereas long-term bonds may suffer the most if the dollar doesn’t stabilize as predicted). One to keep an eye on: FPA New Income (FPNIX), which features some top-rated companies.
3. Money market mutual funds. It doesn’t get much safer than mutual funds (when it comes to low-risk investments), so if you want to hedge (no pun intended) your bets, consider this alternative. They’re easy to get into, especially with so many people trying to ride the trends of a rising stock market, and they may offer the best solution for investors who are still too shaken to take a risk. One word of caution: don’t put all your eggs in one basket. If you’re unwilling to diversify with stocks and bonds, at least spread your money around to several unrelated sectors.
4. CDs. Certificates of deposit are one of the safest investment around (since they’re offered by banks, they are FDIC insured) and tend to yield an excellent return on investment (if you don’t touch them until they mature). The best part is, you can set the maturity date at anywhere from three months to five years (with longer durations often promising to pay out more than other types of securities).
5. Savings account. This one is not just for the kids. You may be earning a pittance on your hard-earned cash, but it’s guaranteed money in your pocket, and it is by far the safest investment you can make. Why? No one can touch it, and it’s federally insured (up to a certain amount). So if you think the market is still too unstable to invest, and you want to avoid risky ventures, you can’t go wrong with a good old savings account.