If 2020 has shown us anything, it’s that a seemingly stable economy can suddenly become unstable. While the ups and downs of the market may cause some to make a shift in their investments, those who stick with their plan usually outperform by a wide margin1.
It is always important to consider your long-term goals, risk tolerance and time horizon. These considerations will help you determine whether it’s smarter to take on more risk or stick with safer investment options.
Investments to consider in 2021:
1. Dividend stocks: Stock market investing can be difficult, and market timing is rarely successful. One investment to consider are stocks that pay a dividend. These stocks provide investment gains through both long-term market appreciation and quarterly dividends. Investors should look for companies with solid balance sheets and a long history of paying increasing dividends every year.
2. Short duration bonds: Short duration bonds are liquid, easily accessible and can be an excellent savings tool. They allow you to invest fairly conservatively and are less sensitive to interest rate fluctuations. Short term bonds can last anywhere from one to three years and tend to yield higher interest rates than money market funds.
3. REITs: Real Estate Investment Trusts (REITs) provide you an opportunity to own valuable real estate and participate in the recovery of the commercial, office space and retail markets. Although the pandemic has shown a negative total return on REITs, they have provided historically competitive total returns and look to rebound this year2. REITs provide you access to dividend-based income and total returns and can help you diversify your investment portfolio.
While the above are only a few investments to consider, it’s important to always consult a trusted financial advisor prior to investing. For more information on how Masonboro Advisors can help you, please contact us directly at 910-742-0509.
1 https://www.forbes.com/advisor/investing/stock-market-year-in-review-2020/
2 https://www.fool.com/millionacres/real-estate-investing/articles/investing-in-real-estate-stocks-and-reits-predictions-for-2021/
Investing involves risks, and investment decisions should be based on your own goals, time horizon and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
Indexes discussed are unmanaged and you cannot directly invest into an index. Past performance is not a guarantee of future results.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.