The Best Investment for 2018 Sometimes, the best investment is safe investments and 2015 could be one of those moments. First, let's look at your investment options. Then, we will focus on finding the best safe investments for 2015 and beyond.
Since the beginning of 2009, stocks and stock funds have been the best investment options. The last six years have often been referred to as "the stock market that nobody loves", but with the 2015 approach, the stock market continued to reach new historical highs. Stocks are not cheap, but there are two sectors that can be interesting: oil reserves and natural resource funds (if oil prices are even cheaper); and gold stocks and funds (if gold becomes cheaper). They are also not safe investments, but there could be opportunities if oil or gold really becomes cheap.
At this time, any bad economic or political news could trigger a reversal in stocks in 2015 or 2016. The risk versus potential rewards suggests that stocks and diversified stock funds are no longer the best investment options. Now, let's look at the other side of the coin: bonds and bond funds. Historically, when the stock market investors of the tanks go to the bonds, which makes the prices of the bonds go up. Many investors see bonds and bond funds as their best safe investment options.
The problem here is that the bonds and prices of the bond funds are close to record levels as interest rates remain historically and ridiculously low. The problem: when rates rise significantly, bonds fall in price and investors lose money. Higher interest rates make existing bonds and portfolios (such as bond funds) less attractive. Looking to 2015 and beyond, bonds and bond funds are probably not your best investment options or even your best safe investments when rates threaten to rise.
In fact, they were never really safe. They just seemed safe because interest rates have basically been on a downward trend since 1981, which raised bond prices and gave investors good returns. Now, the
question is: where do you find the best safe investments (which pay interest) when you are lucky if you can get 1% in the bank and even less in the money market?
The best safe investments may be staring you in the face. If you have a retirement plan in which you work (such as a 401k or 401a), one of your options could be a stable or "guaranteed" fund. You may be able to block 4% or more during a specific period of time. If you have an older "universal life" insurance contract, you can add money with a guaranteed minimum interest rate of 3%, 4% or more. The same could apply if you have a previous annuity contract. Returns like this may not excite you, but compared to stocks and bonds, they could be the best investment options on the horizon.
If interest rates increase significantly in all areas (both long-term and short-term) and you need quick access to your cash, the good mutual fund of the old money market could be one of the best safe investments. As rates rise, your dividends also automatically adjust up. They are not "insured" by the federal government, but many have short-term government securities (T-bills) that are considered one of the truly safe investments in the world.
In normal times, the question of finding the best investment options focuses on stocks versus bonds. I'm not alone when I'm afraid these are not normal times. We (and much of the rest of the world) have lowered interest rates to stimulate our economy and support our markets. There is not much room to lower rates more in the future. That is why I suggest that the best safe investments could be the best investment options available for 2015 and beyond. When the dust settles, the debate over whether stocks or bonds are the best investment will probably take center stage again.
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