Finding The Best Investments For You

Folks frequently ask, what’s the best investment to be in now? Or, what should I invest in now? It’s understandable that given the history of the past couple decades, there always seemed to be a few “sure thing” investments like “dot com” stocks in the 90′s, or real estate in the 2000′s. What’s different now is, you can make money, but you have to learn more about the markets, and be more on top of your investments.

Along with learning to invest, to find the best investments for today it’s a good idea to develop some skills in reading what’s happening in the social sphere, the economy, the environment and politics. Paying attention to the news, you’ll see that the market often reacts to news right away. But for longer term ideas, these blips don’t matter as much as the consequences of policies and decisions made today that will impact the next few decades.

One example is global warming. No matter whether you believe in climate change or not, the fact is that weather patterns are more extreme all over the world. This will affect agriculture, population patterns, energy development and more. You can find investment opportunities in any of these spheres that will benefit your portfolio going forward.

There are also investment vehicles that have come into their own, and are more viable now than ever. Investing in ETFs for example is a less expensive way to invest in a variety of indices, commodities, and other vehicles not usually available to the average investor. This is an easy way to diversify, with less risk than a mutual fund; however the savvy investor still will do their homework and strive to educate themselves on the ins and outs of these types of investments, in order to minimize risk.

If your major concern is to determine what is the best way to invest safely for the future, keep in mind that the mutual funds of the 1990′s and 2000′s never were “safe”, because investors didn’t really know what they were investing in. Your best option for retirement income investing will come with knowledge and research. Not knowing the risks, not knowing the stocks in the funds, and not knowing that nothing is certain for the long term, many people were burned.

It’s important to understand that today, while the markets have climbed slowly back to where they were, many of the systemic risks that cause the problems of two years ago still exist. Volume is down, which means many investors are not trading stocks. The housing market is still not improving, and possibly has not even stabilized. Commercial real estate, which can impact the stock market possibly even more than residential real estate, is considered another shoe yet to drop. Banks are still unwilling to lend to consumers, and with salaries still at 1980′s levels, consumers don’t feel willing to spend enough to drive production and profits. The Wall Street firms that were over leveraged and under capitalized are still in the same position, still investing in the same derivative vehicles that caused the crash. Even top financial advisors and financial managers didn’t see the last crash coming – and they likely won’t again in the future. Individual investors can do at least as well on their own.

There have not been major changes in the way the markets work to prevent the kinds of excesses we recently saw, nor as a result the potential for economic downturns. Individuals will have to decide for themselves what are the best investments to be in, what is a safe investment for the future, and how much risk and reward they are willing to withstand.