In this economy, investment options can seem very uncertain. With the conviction of Bernard Madoff for a massive ponzi scheme and the pervasive underwriting fraud that helped usher in the near failure of the housing market, it is difficult to know where your money will be safe. Morgan Stanley Smith Barney’s investment strategist is predicting the next couple of years will be bull market years for the stock market. This means that the stock market is expected to rise over the next couple of years.
In a bull market, there are certain investment opportunities that are more likely to pay off in the long run, or short run, than others. The key to know about investment opportunities is that they are not guaranteed and that you may lose money, even a significant amount of the amount you chose to invest. Never put money in non-guaranteed investments if you need to have the money increase and must take it out on a certain date.
If you think investment is right for you, here are five types of investment opportunities that may be right for you in a bull market.
The stock market is a logical choice. When prices are low, you’ll want to buy and conversely when prices are high, you will want to sell. In this economy, the trick is to know which companies are going to prosper and which will fail. If you invest in a company that fails, there is little chance that you will recover any money even if the company was a fraud. The best choices are those companies with solid track records and in solid countries.
Investment in commodities is another option. There are mixed opinions on whether gold will be increasing and it has been at an all time high. Mining stocks may also be in a bull market, although this is potentially risky because if the financial experts are off, then the commodities may fail miserably.
Bonds are an enigma of sorts. When the stocks are doing well, the bonds are yielding lower numbers. When the stocks are doing poor, the bonds are yielding great numbers. If you believe that the stocks aren’t in such a bull market as Morgan Stanley asserts, then bonds may be the right investment for you.
Certificates of deposit are a good option for those that need to have the money guaranteed, for a certain date or just want to get a higher yield than the current offering for savings accounts. The problem is that the rates are very low yielding only 1.53% on average for a five year CD.
Real estate has been a tricky market for a couple of years now and mortgage rates are remaining at historical lows. Early 2011 may be a good time to get into the real estate market because homes are still priced low and experts believe that there may in fact be a housing shortage in the coming year or two.
No matter which investment options you choose for 2011, only invest money that you can afford to lose or at least live without until you can get a profit.
Ari Haruni “Smith Barney Sees Multi-Year Bull Market in Equities”, Wall Street Pit.
“Bull Market”, Investopedia.
Joshua Kennon “The Three Types of Investment Risk”, about.com.
Martin Mittelstaedt “How High Will Gold Go? There are some Scary Visions out There”, CTV News.
Penelope Wang “Make Money in 2011: Your Investments”, CNNMoney.com
Sheyna Steiner “CD Rates for Nov. 11, 2010”, Bankrate.com
Alexandra Zendrian “Economist: Housing Shortage Coming in 2011”, MSN Real Estate.