P2P lending platforms connect borrowers with individual lenders, offering higher returns than traditional savings accounts. Platforms like LendingClub and Prosper allow investors to choose loans based on risk level. The top high-yield savings accounts have annual percentage yields (APYs) of 5% and higher. Those with cash stashes beyond FDIC limits can earn well over 5% with T-bills. Still, the Fed is signaling that rates will likely drop in the new year, which would definitely impact what investors of every ilk earn on their extra cash. In investing, to get a higher return, you generally have to take on more risk.

Best for Growth

• One of the best things about Masterworks — besides how easy the platform is to use — is that it’s accessible to all investors, both accredited and non-accredited.
• My favorite broker to use for index fund investing is — you guessed it — eToro.
• If you plan to retire in about 30 years, you could choose a target-date fund with 2050 or 2055 in the name.
• You could lose money in sterling even if the stock price rises in the currency of origin.
• Many people, especially newer investors, don’t consider the tax consequences of their investments, which can leave them short of their financial goals.

REITs trade on stock market exchanges just like other public companies. REITs can be especially great for income since they don’t pay corporate taxes as long as they pay out at least 90% of taxable income as dividends to shareholders. They pool investors’ money and use it to accumulate a portfolio of stocks or other investments. The biggest difference is that ETFs trade on major stock exchanges, and you can buy shares whenever the stock market is open. Mutual funds price their shares only once a day and aren’t nearly as liquid. U.S. stocks have delivered better returns than bonds, savings accounts, precious metals, and most other investment types over long periods.

• Make sure you understand your investment strategy, which will give you a better chance of sticking with it when it falls out of favor.
• Peer-to-peer lending usually takes place through a company that facilitates the transactions.
• The best type of investment for you depends on your investment goals and risk tolerance.
• With a projected annual growth rate of 5.6% per year for healthcare expenditures through 2032, according to data shared by Becker’s Hospital CFO Report, the sector is poised for sustained growth.

If that sounds appealing, jump over to our list of the best robo-advisors. If you’d rather do it yourself, continue reading — we’ll take you through the steps. A special purpose acquisition company (SPAC) is a type of shell company that goes public and raises capital to acquire or merge with an existing company. Other major brokers like Charles Schwab and TD Ameritrade don’t allow you to purchase cryptocurrency directly. When the bond reaches maturity, it pays back the entire principal. “Small caps have underperformed large caps since approximately 2015 and currently trade at a valuation of 19.5 times compared with their 20-year average price-to-earnings ratio of 21.3 times,” says Kolano.

Best for buy-and-hold investors

So very safe investments such as CDs tend to have low yields, while medium-risk assets such as bonds have somewhat higher yields and high-risk stocks have still-higher returns. Investors who want to generate a higher return will usually need to take on higher risk. Investing can be a great way to build your wealth over time, and investors have a range of investment options, from safe, lower-return assets to riskier, higher-return ones.

– Investing in an era of geopolitical unrest

When it comes to cons, the company faces intense regulatory scrutiny over antitrust issues as well as controversies surrounding data privacy. GOOG stock also trades for a premium when compared with other tech stocks. But AAPL’s dependence on the iPhone is a two-way street, making it vulnerable to market saturation and declining sales. If it misses its growth expectations, you won’t see much upside.

Meanwhile, medical device companies such as Medtronic (MDT) and Boston Scientific (BSX) are innovating in areas like minimally invasive surgery and cardiovascular health. If you’re unsure what to do with Best investment opportunities your money in the months ahead, here are some high-level insights into where some of the most important industries stand and how they may fare in the upcoming year. Pamela is a firm believer in financial education and closing the generational wealth gap. She got into journalism to tell the kind of stories that change the world, in big and small ways.

A mutual fund pools cash from investors to buy stocks, bonds or other assets. Mutual funds offer investors an inexpensive way to diversify — spreading their money across multiple investments — to hedge against any single investment’s losses. OK, a savings account isn’t technically an investment, but rates continue to be high, even following a series of cuts by the Federal Reserve last year. That’s earned them a place on this list, especially for people who have a short-term goal or can’t stomach the market volatility. Online savings accounts offer higher rates of return than traditional bank savings or checking accounts.

Open your account

To help investors decide which strategies to consider in the coming months, we’ve put 10 of-the-moment investment considerations for next year under the microscope. But ongoing geopolitical and macroeconomic uncertainty threatens to hamper the performance of investment portfolios in 2025. Small-cap stocks are often also high-growth stocks, but not always.

Bonds Are Made for Long-Term Investing

Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin.

Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. Just as owning the right investments will help you reach your financial goals, where you invest can be just as important.

In fact, many of today’s stock trading platforms will let you get started with as little as $1. Emerging markets are countries that look likely to gain a more significant foothold within the global economy. And inside a tax-friendly IRA, you’ll avoid taxes on the interest you accrue, as long as you stick to the plan’s rules. Bonds are considered safe, relative to stocks, but not all issuers are the same. Some of the commonly known treasury securities are bills, notes, bonds, and TIPS (or Treasury inflation-protected securities).

We mentioned about the high-income group, very high-income group, and salaried class. Similarly, investing your money in 401 (k) also gives you tax benefits. However, investing in 401 (k) can be a rip-off due to high costs and poor investment choices.

There are also some very popular dividend growth ETFs, including SCHD, VIG, and DVY. Many bonds also come with periodic payments (known as “coupon payments”), which are paid in regular installments, typically semiannually, throughout the life of the loan. In total, more than $1.45 billion has been invested through Percent — and more than 89% of investors reinvest after their first deal.

If rates fluctuate, the payout on these funds will also fluctuate. So these funds can be a good safe haven for investors and their holdings are backed by the U.S. government. While investing can generate high returns, you’ll also want to balance potential gains with the risk involved. Investors of all types aim to build their portfolios with the best investments, but the top-performing ones can vary. If you’re not already maximizing your tax-efficient accounts, you may want to consider doing so before pursuing a long-term investing strategy in a taxable account.