If there is one thing the COVID-19 crisis taught us, it is the reality that even a seemingly stable economy could topple in an instant, leaving those who are unprepared scrambling for income. As 2021 rolls in, it is high time for us to re-examine our finances and start thinking about investments, especially those who haven’t started one yet.
Rather than spending the stimulus check from the government on trivial matters such as a new cell phone, laptop, clothes, or any other material stuff, consider investing that money on those pandemic-resilient investments. Real estate, stocks, bonds, and retirement plans are just some of the best investment options that are time-tested.
Why You Should Invest
Pandemic or not, we all need another source of income to pay off debts, fund our retirement, or get us off any financial troubles. Most importantly, investing allows us to grow our wealth. This helps us meet our financial goals and boost our purchasing power. We cannot always rely on our salary to pay for everything. It is always a wise decision to invest that extra money you have.
Thus, here are some of the best investment opportunities you should consider to put your money on.
1. Boost Your Savings
Financial experts all agree that investing in stocks is still the way to go. However, there is no assurance that the market will still take a dive this year. Although the S&P 500 index was up by over 14 percent in December 2020, we still need to adjust our expectations.
With all these said, we can all agree that cash savings are the default choice for investment. Although putting your money in the bank does not give off higher interest rates, there is one thing that cash assures — your liquidity. In times you need money ASAP, you have cash on hand to cover up for any expenses.
2. Get into Stocks
As said, there is no certainty where the stock market will head this year. Nonetheless, stock market investment has always been about playing the average. And playing the average simply means maintaining a large position in stocks. But you should not just invest in any random stocks. You have to be selective.
Though major indices are currently banking on the strength of tech stocks, there are plenty of other emerging sectors from the market you could invest in.
Apart from tech, defense stocks seem to be promising. Accordingly, it is expected that commercial aerospace and solid defense will recover this year. Even when this sector under-performed in 2020, the 30+ year track record of its new highs within 30 months makes it a good stock option to invest in.
Another stock sector you should consider investing in is biotech. With the promising prospect of COVID-19 vaccines, biotech is among the strong sectors in 2021.
3. Real Estate Is Still a Good Choice
Real estate is an investment opportunity you should consider as well. The appreciation levels for real estate properties have been 6 percent per year since the 60s. Even with the turbulent market in 2020, seasoned investors all agree buying real estate property is still a good move.
Apart from the increase of real estate value over time, real estate investors get to enjoy several tax breaks and deductions. Furthermore, as you pay down your mortgage, you increase your equity and wealth in the long run.
However, if you are not ready yet to own and manage a property, you may consider getting into a real estate investment trust (REIT). Like other stocks in the market, you could buy and sell publicly-traded REITs, trade in higher volumes, and get in or out of a position really quick. And another good thing about REITs — they usually offer higher dividends.
4. Get a Side Hustle
Side hustles are not often thought of as an investment, but it is a form of investment in a very real sense. Not only does it help you gain more skills or hone your existing ones, but it helps you increase your bottom line. And in this digital age, it is not at all difficult to find one. You could tutor online, be a social media manager, or start a bookkeeping service.
You could also start your own small business with the skills you have. Start on your own and slowly build your dream team as the need calls. Remember, though, that in opening a business, you need to consider government licenses, certifications, and insurance coverages from a field marketing organization.
As 2021 rolls on, it is pretty much evident that we have to make some changes in various aspects of our lives, particularly with our finances. We can never be certain of the future. Perhaps this pandemic will eventually die down, or it will go on for another year. Whatever it may be, as long as you are financially stable, you can withstand any harsh turn of the economy.