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What to invest in now?

Everyone would love to invest their money where they can get good returns. As of now, as we enter 2019, what are the areas we can invest in to expect decent returns? Let us look at some options where we can invest money to get good returns under present circumstances.

Investment avenues

Traditionally investments are made in stocks, bonds, and real estate. Investment in stocks carries a high level of risk as the stock market can be volatile. While the stocks you buy can give you great returns, there is a potential risk of losing all your investment.

Bonds on the other hands are safe investments. But, the returns they give are less. Investing all your money in bonds may be a safe option, but it will not fetch you good returns.

So, an ideal option is investing in both stocks and bonds. More about that later.

A third option is real estate. Investing in land can fetch good returns. It is very rare that land can lose value. Land and real estate generally always appreciate in value. But it takes a lot of time for investment in real estate to yield returns. Buying land is an expensive proposition. You need a lot of investment. So, think about real estate only if you have a lot of money and are ready to wait a long time.

One of the quickest ways to earn money is the stock market. Since there is an inherent risk, the money you invest can be divided between stocks and bonds. The formula for how much money to invest in stocks is very simple, it is 100 – your age. So, if you are 30, invest 100-30 or 70% in stocks and the rest in bonds. If you are 40 years, then invest 60% in stocks and the rest in bonds.

So, which stocks should you invest in now?Let’stake a look at a few picks:

  • Realty Income: This real estate investment trust has been doing consistency well. It has given an annualized return of 15.8% since it was listed. There is no reason why the company won’t do well. Its clients are bellwether companies Walmart and Walgreens. It uses the net lease concept for business and its business growth seems assured.
  • Starbucks: The company is an established brand. Its recent forays in Asia-Pacific and China has seen it grow from strength to strength. Its China sales grew 41% [i]in Jul-Sep 2018 indicating its evident success. It’s a good buy to add to your portfolio.
  • Johnson & Johnson: This is a blue chip stock of a legendary company that has done consistently well over the years. It is spread across pharma, medical devices, and consumer goods, with the pharma business dominating ($40 million). The company will grow steadily irrespective of the economic situation and hence can be considered a good and safe investment.
  • Berkshire Hathaway: This is the company of legendary investor Warren Buffet. A legend in the field of investments who made millions from the stock market, Buffet’s magic touch is making Berkshire grow steadily. It has an unmatched reputation in the market. Its investment in various sectors like utilities, railroad, insurance,andaerospace ensure diversification, This is definitely a good buy.
  • Sprouts Farm Market: This grocery chain focus on organic food, which is something in high demand. The only way this company would grow is up. It has done well doubling its revenues in 4 years. Its constant growth (315 stores in 19 states) and its foray into private label sales are all good trends for the future. This stock is a good buy.

If you want to invest now, invest in good stocks with a mix of upcoming companies and established giants. Invest your money in stock depending on your age, with the remaining in bonds.

 

[i] https://money.usnews.com/investing/stock-market-news/slideshows/best-stocks-to-buy-this-year?slide=2