Have you been reflecting on your money this month? If it’s been languishing in a savings account, earning minimal interest, you might be considering which investment areas are right for you in 2021. After all, if you can grow your savings with a few smart decisions, why wouldn’t you? Keep in mind that this is general overall advice, and you always need to weigh it against your unique financial situation and risk threshold. With that disclaimer covered, here are five best investment options for 2021.
Bricks and Mortar
Since the burst of the housing bubble in 2008-ish, the property market has rebounded in fine form. While naysayers have been predicting another 2020 or 2021 crash in the USA, the real estate market is performing better than most other economic sectors.
Given this robust performance, it makes sense to consider whether your portfolio includes a residential or commercial property investment. If not, you might want to start by looking at warehouses and industrial spaces.
The other area expected to grow is “dark stores,” which are closed for day-to-day operation but are still doing deliveries or curbside pick-up. Steer clear of hospitality and hotels for now as the future remains unclear for these businesses.
Experts are expecting the overall share market to grow in 2021. Goldman Sachs is predicting a 17% rise in the S&P 500 index over the year. Experts generally advise continuing to buy shares through good times and bad and avoid panic selling when prices drop. If you take this approach, your portfolio should show an overall growth trend over your investing lifespan. Remember, you shouldn’t view shares as a liquid investment because pulling them out at a non-optimal time can result in a heavy loss.
While bitcoin and cryptocurrency still have many skeptics, they deliver a year-on-year ROI that is far outstripping other asset classes such as the S&P 500 and the gold market. Even when it crashes and the value plummets, it has historically gone on to beat previous records every time. Bitcoin’s performance has caught the attention of some of the big guys on Wall Street, and several major companies have been in the news for investing in bitcoin. If you want to get it on the action and make some cash, 2021 might be the year to do it.
Max Your 401(k)
If your threshold for risk is relatively low, and you don’t want to risk losing any of your hard-earned cash, a relatively safe option is to put more money into your 401(k). There are several reasons this is a worthwhile option to consider. Any contributions are tax-deductible in the year that you contribute. Not only that, but most employers will match what you contribute, essentially giving you access to free money – and who doesn’t like free money?
Build Your Emergency Fund
The last option isn’t strictly an investment per se, but it is vital after the last 12 months’ uncertainty. Financial advisors generally recommend building an emergency fund of between three and nine months of your monthly expenses. The idea is for you to be able to survive without an income if something unexpected (like a global pandemic) occurs. There is a good chance that many people who have emergency funds have used them up in part or in full in recent times, so now is the time to start building yours back up.
Now is the time to think smart and make your money work harder. What will you invest in this year?