Despite the upheaval in the country centered on the coronavirus, Americans are working just as hard as they ever did, albeit at home. Since they can’t go to concerts, festivals, or other group entertainment, they must decide what to do with their money. Investment looms large in most Americans’ minds.
Types of Investment
Are there types of investments that would best suit your lifestyle? To answer these questions, let’s take a look at the investments first. The most obvious and popular investment is in the stock market.
The stock market is where companies go when they need money. They sell stock in their companies on one of the exchanges. They repay their investors with dividends. An example would be NASDAQ: NTRS. Now, Northern Trust Corporation whose stock this listing describes is one of the leading wealth management services and is doing very well.
The stock market is the type of investment best suited to those whose lifestyles include enough money to take a chance on or money they won’t miss. Stocks rise, fall, and implode altogether every day, so if you won’t miss the money, by all means, invest in the stock market.
The thing about stocks is that you can use a broker to buy and sell for you if you don’t have the time to do it yourself. This costs money, so investors should weigh whether they can afford to pay someone to do it for them. Lots of investors watch the ticker tape in order to buy and sell themselves thus saving money. Your lifestyle will dictate which path you should follow.
Should you wish to withdraw any of your funds, the broker will charge you a fee in addition to filling out some paperwork. This can be done either on the ground or online. There may be a penalty for early withdrawal.
Exchange-Traded Funds Or ETFs
An index is a list of publicly traded stocks like the S&P index. Rather than pick companies in which to invest, the index is passively tracked. When the index makes money, the investor gets a share of it. There is no middle man to buy and sell for the investor.
An ETF tracks an index as if it were a stock instead of just passively tracking the whole thing. Thus, the ETF can rise and fall in value just like an index. There is no middle man here to buy and sell your ETF. The main difference between the two is that indexes are priced at the end of the day. You can buy an index fund no matter the price; it will remain the same until closing. The ETF fluctuates all through the day. Those who wish to control the price of their investments might prefer an ETF.
Those whose lifestyles give them a little extra money at the end of the month might want to invest in ETFs. Some are priced from one or two dollars on up. Many investors are the buy and hold type, and ETFs are well suited to this type of lifestyle.
Robo-Advisors
You see them across social media and in print media as well. Robo-advisors such as Betterment, Wealthsimple, and Robinhood are goal-based savings platforms. They invest your money in ETFs and manage your investments for you for a small yearly fee. You deposit as little as five dollars into your account weekly or monthly, however you can manage. Then you’re off and running (or investing.)
Robo-advisors are best suited to those with little to spare but still want to invest. Robo-advisors are just as responsible investing in stocks, index funds, or ETFs. That they accept such small amounts of money to invest makes them open to a wider variety of investors. Lifestyles aside, anyone can begin with Robo-advisor, from teens just starting out to seniors who’ve paid their dues.
It’s easier to withdraw your money from a Robo-advisor than it is from stock or ETF. While all three continue to make money from the investment, there are fewer hoops through which to jump when withdrawing from Robo-advisors. The funds go right into your checking account when you need them.
I’m Jaylin: Guest post service planner of Leelija and full time blogger. Favourite things include my camera, traveling,caring my fitness, food and my fashion. Email id: [email protected]
