For the most part, investing hasn’t changed a lot in 2022. Most people still put their money into things such as series I bonds and S&P 500 index funds. However, there are also a few newcomers, such as cryptocurrencies.
It is hard to predict which one of these investment vehicles will make you the most profit in 2022. It often depends on a particular asset that you’re buying (i.e., stock of a specific company). “If you’re a risk-averse investor, you should definitely consider opening a high-yield savings account,” suggests District Advisory, a CPA Services Firm in Washington, DC.
Why should I invest in the first place?
To put it plainly, investing is the best way to increase your current wealth. Not only that, it allows you to combat inflation that slowly but steadily eats away your savings. The worst thing you can do is leave your money lying around. Instead, you can put your cash in different assets, thus preparing yourself for retirement and potentially a few luxuries down the line.
One of the most important things to remember is that risk increases with the potential profit. In other words, if you want to make high returns, you will also have to accept a certain level of risk that a particular asset carries. So, depending on their investment habits, some people will give an advantage to no-risk saving accounts, while others will invest heavily in cryptocurrencies.
Ideal investments in 2022
1. Savings accounts
Due to recent global events, inflexible investors are looking to put their money in conservative vehicles. One of the best investments for conservatives is a high-yield saving account. Although this type of investment doesn’t provide high yields and barely helps you counter inflation, you will still make some money.
The best thing about savings accounts is that your money is readily available. If you ever need cash or perhaps want to transfer private funds elsewhere, you don’t have to wait for a company to sell your assets on the market. In fact, your money will be available within a day or so.
2. Government bonds
There are various government bonds you should consider purchasing. Municipal bonds are a nice investment, but there are also some other great government vehicles you might consider buying. Government bonds are riskier than savings accounts but are generally regarded as a very safe option. They are much safer than company bonds, as there is the US government vouching for them.
Keep in mind that your potential profits might vary with interest rates. That being said, long-term bonds are much more unpredictable than short-term bonds. Generally speaking, you can more or less predict how much money you’re getting back, which isn’t the case for stocks, cryptocurrencies, and other risky vehicles.
3. Series I bonds
Series I bonds have become very popular in 2022. This asset is issued by the US Treasury, making it one of the safest investments in the world. The reason to consider this asset is that it provides protection against inflation, something that can become a major issue in the upcoming months, given the state of the US economy.
The interest rate of series I bonds is directly connected to inflation. As inflation rises, so does the interest and, ultimately, payout. However, as inflation falls, the potential profit rises with it. Anyway, these bonds are a great purchase for people who think that high inflation is ahead of us.
4. S&P 500 index funds
As mentioned, things are not going well for the US economy. That being said, if you manage to purchase S&P 500 index funds when the economy is at its lowest point, you can make incredible profits.
The best thing about indices is that they’re well-diversified. S&P 500 index represents the US economy as a whole, so a sharp drop in its value usually signifies a recession. Overall, investing in this fund is ideal if you want to buy stocks but don’t have enough knowledge regarding the financial markets.
5. Property investment
Purchasing a property is always a good thing. It is a nice way to diversify your portfolio and get something tangible for your money. Property investments are especially amazing for people who think long-term.
When purchasing a new apartment or a house, most investors are looking to make money out of rent. However, if you wish to be more active, you can also consider Airbnb. Those who have enough knowledge in the field, and have a knack for design, might flip a property and make incredible profit in a short amount of time.