While 2020 has been a rough year for most, for investors, the year has presented both ups and downs. While markets took a dive earlier in the year, resulting in a fair amount of panic selling, the market has also seen some of the biggest rises ever despite an ongoing recession.
For those looking to invest in 2020, some options may be more worthwhile than others. Below is a range of investments that carry varying levels of risk that you could consider in 2020.
Certificates of Deposit (CDs) A relatively safe investment, certificates of deposit (CDs) are federally insured time deposits that are issued by banks. These deposits have specific maturity dates that can range from weeks to years and, once matured, CDs pay out the principal deposit plus any accrued interest.
While CDs are considered a safe investment, it must be noted that their earnings will fluctuate with interest rates, so there is always some risk involved in this type of investment. CDs are also not as liquid as other investment options, such as savings accounts or money market accounts, as any withdrawals before the investment’s maturity date will incur penalties.
Government Bond Funds Another relatively safe investment in 2020, government bond funds are mutual funds that invest in debt securities issued by the government and its agencies. Because these funds invest in debt instruments such as mortgage-backed securities issued by government-sponsored enterprises, they are considered some of the safest investments as they are backed by the full faith and credit of the US government. Government bond funds are also highly fluid, which is great for investors who may need quick access to their funds.
Nasdaq 100 Index Funds Index funds that are based on the Nasdaq 100 are a great medium risk option for investors who want to diversify their portfolio while investing in some of the biggest tech companies in the world. A collection of Nasdaq’s 100 biggest companies drive the index, which means that investors will not be affected by the failure of any single company, making it a relatively safe investment option.
In 2019, cryptocurrency entered the Nasdaq stock exchange through Cryptoindex.com. The index, which had previously been listed by Bloomberg, Tradingview, and Reuters, is designed to give traders a comprehensive view of the performance of the cryptocurrency market in real-time. For investors looking to make cryptocurrency their next investment, there are several things to consider. It would be wise for investors to inform themselves by reading a Guide to Buying Crypto before they make any investments.
Real Estate and Rental Housing Real estate is always an excellent long-term investment and rental housing is a good option for people looking to make additional monthly income. Due to mortgage rates hitting an all-time low of 2.88% recently, there has been no better time to invest in the property market. While this type of investment doesn’t offer the liquidity of some of the other options on this list, it does offer investors the chance to diversify their portfolio and, with the current demand for real estate driving rent prices higher, the real estate sector may be the best investment bet this year.
While 2020 has been a tough year, this year has opened up new opportunities for savvy investors who have been able to capitalize on the volatile market. Before investing any money this year, be sure to weigh up the risks and rewards of any financial decision you make and ensure that it fits into your long-term investment plans.
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