Wednesday, February 18, 2015
Best Investments for 2015
Regardless of your level of investing, strategies must constantly change to accommodate the fluctuations in market conditions. It's your money, and you want the best results possible without taking on too much risk.
The following tips will help you determine which investments will garner the strongest return for you in 2015:
Stocks are Still a Prime Investment Idea
The S&P 500 index generated a return of over 10 percent in 2014, and analysts expect it to stay strong through the end of 2015.
If you purchased stock at the beginning of 2014, that stock is likely trading at a height of 16 times that of the original trading price, a height that is 30 percent over the average long term return. Keep those stocks close, if possible. Only sell if you're almost sure that you will lose money on that particular stock.
Buying stock is expensive, and will likely increase over the course of 2015. Stocks should be the bulk of your investment portfolio for the coming year.
Spread Wisely Into 401(k) Accounts
When discussing stocks, you should be aware that this also includes investing in a 401 (k) account because your money is invested as part of a pool in a number of stocks. A 401(k) significantly reduces the risk you normally experience with investing straight into the market.
While the return might not be as great, you'll likely gain an average of between 5 percent and 7 percent for the year on your accounts. You probably won't lose money unless we hit another recession, which is unlikely.
Bonds are Still Safe for Long Term Investments
Interest rates are low for bonds right now, and aren't expected to increase by much any time soon.
That being said, if you're looking for a great place with very little risk to stash money for retirement, consider buying bonds. People who buy bonds do so not to generate immediate income, but to create a nest egg for their retirement.
While you can't expect a large return on this type of investment right now, sit on your bonds and watch them grow over time.
Diversify Across Multiple Types of Funds
When investing your money, never stick to just one investment vehicle. Diversify your portfolio to allocate 20 percent to 30 percent of your funds for foreign equities, with a small percentage of that set aside for emerging markets.
When investing, you don't always have to use one firm for your entire portfolio. Depending on what they offer, it might be a good idea to separate your foreign equities and emerging market accounts with different firms to get the best results.
Gennady Barsky is the CFO of JetSmarter and Real Estate Mogul. Barsky is a lover of all things automobile and has a passion for Social Media.