COVID-19 has changed how the world operates. Thinking about how to invest in the current dynamic environment? Below are 10 ideas to help you brainstorm where to put your dollars!
In the recent volatile COVID-19 environment, investing in stocks can be a good way to express a specific view. If you have a view on which companies might benefit or suffer from this long lasting pandemic, investing in individual stocks can be a good way to put these views into action.
Exchange-Traded Funds (ETFs)
Investing in ETFs can be a cost effective way to achieve exposure with diversification. An ETF is bought in a similar way that a stock is bought. An ETF can potentially achieve the diversification benefit of a fund while being cheaper than investing in a mutual fund.
Stock options can be used to increase your leverage in a stock investment. But if used this way, it is generally much riskier than simply buying the stock. A stock option is right to purchase or sell a stock at a certain price for a certain time frame. If the stock price does not reach the said price when the stock option expires, it becomes worthless. You can read more about it here.
It seems like after the bidding war for homes, we are currently going into a bidding war for rents. With interest rates at historic lows however, investing in a rental property can make a lot of sense. This typically requires a down payment that can be sizable and also requires getting a mortgage assuming the home isn’t being bought by all cash.
Real Estate Crowdfunding
If you’d like to invest a smaller amount in real estate, real estate crowdfunding can be a way to have exposure to real estate but have control over the amount. The downside is that it is going to be a passive investment as you cannot actively control the investment.
Farmland is an unique asset class to invest in. The supply for farmland is limited, yet the world population continues to grow. As demand for food and grocery prices generally increase over time, farmland is definitely an asset class to consider for your investment portfolio. You can read more about how to invest in farmland here.
Certificate Deposit (CD)
If you’re very risk averse, a CD can be a good way to earn interest. Simply leave your money with a bank for a specific amount of time and they will pay a specific interest. The key challenge to this is that interest rates are currently very low, so you won’t be getting a significant return on your cash.
Peer to Peer Lending
Peer to peer lending can be a great way to earn a better return given the current low interest rate environment. However, this requires research into the credit worthiness of the lendee.
Venture Capital Crowdfunding
Want to invest in the next unicorn? Venture capital crowdfunding enables you to invest in startups raising capital. This can be risky as there is no guarantee the startup will survive or generate profits in the future.
Investing in physical commodities such as gold and silver has been historically used as a way to preserve value and fight inflation. Physical commodities have to be stored somewhere and often the condition of the commodity will affect its value.
If your risk tolerance is high, cryptocurrency has been all the rage for the past few years. Some of the most popular ones are Bitcoin, Ethereum, and Dogecoin. It should go without saying that cryptocurrency is very volatile and difficult to value.